Baldor Proxy details share ownership, exec compensation

Most of the executive officers at Fort Smith-based Baldor Electric saw their 2008 compensation decline or stay relatively flat from 2007 levels, according to a Proxy statement filed Friday (April 3) by the company.

Baldor will hold its 2009 shareholders meeting 10:30 a.m., May 2 at the Fort Smith Convention Center.

There are four shareholder proposals on the voting agenda.
Proposal 1: The nine-member Baldor Board of Directors recommend that Merline Augustine Jr. (board member since 2000), Baldor CEO John McFarland (board member since 1996) and Robert Proost (board member since 1988) be re-elected to the board for terms ending in 2012. In 2008, each director was awarded $152,493 for fees and other compensation related to board service.

Proposal 2: The Baldor board recommends Ernst & Young be ratified as the company’s public accounting firm. Ernst & Young received $1.949 million for audit and accounting fees in 2008.

Proposal 3: The board seeks to amend the 2006 Equity Incentive Plan by increasing to 1.5 million the shares available to the plan. As of March 16, the plan had 837,483 shares available in a plan open to about 4,800 Baldor employees.

Proposal 4: The board seeks to create a plan for tax deductible executive incentive compensation. The IRS now requires deductions of compensation up to $1 million if the compensation meets certain criteria. The IRS code requires the plan be approved by shareholders. “Approval of the Plan is only to allow the Company to take advantage of tax deductions and will not result in a change in the Company’s practices with respect to determining the amount of incentive compensation paid to executives,” according to Baldor’s Proxy.

SHARE OWNERSHIP
Baldor Electric is relatively safe from takeover in that there is not a person, institution or other company holding a large share of the company’s stock.
In the Proxy statement, only four groups are listed that hold more than 5% of Baldor stock.
Baldor Electric Company, Employees’ Profit Sharing and Savings Plan
3.760 million shares, or 8.1% of all shares

Lord, Abbett & Co. (New Jersey)
3.384 million shares, 7.3%

Barclays Global Fund Advisors (San Francisco)
3.020 million shares, 6.5%

AXA Financial (New York City)
2.671 million shares, 5.8%

The 25 executive officers and directors of Baldor Electric collectively hold 1.929 million shares, or 4.1% of the share class.

EXECUTIVE COMPENSATION (includes base salary, stock and option awards and insurance and retirement benefits)
John McFarland, chairman and CEO
2008: $1.511 million
2007: $1.530 million

Ronald Tucker, president and chief operating officer
2008: $879,281
2007: $968,953

George Moschner, chief financial officer and secretary
2008: $536,949
2007: $374,723 (Moschner joined the company during 2007)

Ed Ralston, executive vice president, business integration
2008: $477,357
2007: $503,196

Randy Colip, executive vice president, sales
2008: $490,784
2007: $488,529