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Former E-Trade CEO Sees Pay Drop to $12.2 Million

Christos Cotsakos was a target of criticism over his 2001 compensation of nearly $80 million.

May 01, 2003|Tom Petruno | Times Staff Writer

Christos Cotsakos, the former E-Trade Group Inc. chief executive who last year became a lightning rod for criticism over executive pay, saw his compensation drop sharply for 2002 -- though he received $12.2 million overall.

His financial package, which included such perks as payment for a home security system, tax-planning services and a company car, was detailed in the Menlo Park-based online brokerage's proxy statement released Tuesday.

The 54-year-old Cotsakos, who boasted in the late 1990s about "reinventing" the brokerage industry for the online world, quit in January. That was eight months after he and E-Trade were hit by withering criticism over his 2001 compensation, which totaled nearly $80 million in pay and stock awards.

He ranked as one of the highest-paid executives in the brokerage industry, even though E-Trade racked up total losses of $427 million over the course of 2001 and 2002, including one-time write-downs.

Under fire, Cotsakos last May returned about 30% of the 2001 pay package and signed a two-year contract that provided for bonuses but no base salary.

Since his surprise departure in January, E-Trade has taken steps to change its governance structure, such as adding more independent directors and increasing oversight of executive compensation. Cotsakos was succeeded as CEO by Mitchell Caplan, who had been the company's president.

Cotsakos' financial package in 2002 included $313,846 in salary paid before his base salary was eliminated; $6.38 million in bonuses paid in January 2002 based on E-Trade's financial performance in 2001; and $5 million the company paid into a supplemental executive retirement plan for him.

The executive also received $517,105 in other benefits, including $23,890 for a company-paid car, $97,715 for tax-planning services, $271,089 for the value of a life insurance policy and $99,931 that went in part to pay for a home security system.

"They had to pay him a lot to go away," said Richard Repetto, an analyst at Putnam Lovell NBF Securities in New York.

As previously disclosed, Cotsakos will continue to draw some compensation this year as part of his severance agreement. He'll get $4 million in cash, an office through July and a company car through January 2004.

Cotsakos could not be reached for comment. At E-Trade, spokeswoman Connie Dotson said the firm hoped the controversy over Cotsakos' compensation "was all behind us."

E-Trade shares rose 12 cents to $5.50 on the New York Stock Exchange. The price is up 13% this year, though it's down from a record high of $62.75 in 1999 when Internet-related shares were soaring.

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