As part of an ongoing cost-cutting program, Charlotte, NC-based Jones Act carrier Horizon Lines plans to eliminate corporate perks for the firm's four top executives.
The Compensation Committee of the Horizon Board of Directors approved the move on Wednesday as part of a company-wide effort to eliminate perquisites at all levels.
“We believe the perquisite elimination for executive officers is consistent with emerging best practices in corporate governance,” said Chuck Raymond, Chairman, President and Chief Executive Officer. “In this ongoing challenging business environment, we as senior managers must continue to set new standards that support the organization as it strives for increased efficiencies and customer service excellence.”
According to a Horizon statement, the eliminated perks include, but are not limited to, country club memberships, automobile allowances and tax “gross-up” payments made to reimburse an executive officer for individual income tax incurred with respect to a perquisite.
Horizon plans to increase the base salaries of the four executives as of Jan. 1, 2010 to partially offset the eliminated perks. However, said the firm, no adjustments will be made to the salaries to compensate for tax "gross-up" payments.
In addition to Raymond, the executive targeted by the move include Michael T. Avara, senior vice president and CFO; John V. Keenan, president and COO; and Brian W. Taylor, president and COO of Horizon Logistics Holdings.
Like many carriers, Horizon has been struggling through the global economic downturn. The carrier reported third quarter revenues of $308 million, a 12.6 percent slide from the year ago period and profits of $8.4 million, a 24.3 percent decline from the third quarter of 2008.
