Leonard "Boogie" Weinglass, who as absentee chairman presided over Merry-Go-Round Enterprises Inc.'s slide into bankruptcy court, wants to double his annual salary to $300,000 now that he's back running the company full time.
Merry-Go-Round has asked a federal bankruptcy court judge in Baltimore to approve the raise.
The company also asked Judge E. Stephen Derby for permission to pay bonuses totaling $185,000 to four unidentified senior executives for their performance last year, when
Merry-Go-Round lost $45.6 million. And it wants to boost the yearly pay of Isaac Kaufman, its executive vice president and chief financial officer, from $192,880 to $225,000.
Mr. Weinglass' 1993 salary of $150,000 is inadequate now because of "his increased responsibilities and time commitments," Merry-Go-Round said in court filings. For Mr. Kaufman's part, "exceptional performance and contributions" make him worthy of a $32,120 raise, the company contended.
Salary bonuses of $185,000 for last year would be sharply lower than the $910,000 in total bonuses paid for 1992, Merry-Go-Round said.
A national clothing retailer based in Joppa, Merry-Go-Round landed in Chapter 11 bankruptcy proceedings in January after it misjudged which fashions teen-agers would buy last year. The company continues to operate while restructuring its debts, but its finances are under the court's supervision.
Getting court approval for executive pay increases is a routine but often controversial item in Chapter 11 proceedings. Sometimes creditors object, arguing that the raises sap a struggling company's capital and shrink the resources to pay off debts.
But the committee representing Merry-Go-Round's unsecured creditors does not object to the proposed raises for Mr. Weinglass and Mr. Kaufman or to the proposed 1993 bonuses, Merry-Go-Round said in its filing.
A $300,000 salary for Mr. Weinglass, one retail analyst said, isn't out of line. The company founder's $150,000 salary last year was essentially "an honorarium" for his part-time duties as Merry-Go-Round chairman, said Peter N. Schaeffer of Dillon Read & Co. Inc.
Now that he has returned from his Colorado retreat to work full time in Joppa, Mr. Weinglass is "entitled to be paid for his time, even though the company is ailing," Mr. Schaeffer said.
Top executives at other retailers of Merry-Go-Round's size -- close to $1 billion in sales -- command $500,000 annually and more in base salary, he added.
Mr. Weinglass' salary is but a small part of his stake in Merry-Go-Round. According to a Securities and Exchange Commission filing last year, Mr. Weinglass owns more than 5 million shares of stock in the company. That stake, worth more than $80 million a year ago, now is worth about $10 million.