Circuit City rewards outgoing CEO

RICHMOND, Va. — W. Alan McCollough, who helped turn around a once-struggling Circuit City Stores Inc., plans to forfeit long-term compensation worth about $7 million, according to a regulatory filing.

McCollough, who handed over CEO duties in February and will lose the chairman title in late June, saw his compensation more than double to $5.5 million in fiscal 2006 from $2.5 million the previous year, according to a Securities and Exchange Commission filing.

But imbedded in the report is a note that McCollough plans to forfeit $3.3 million worth of performance-based restricted stock awards — a big chunk of his pay package. He also asked to receive no stock options, refusing an award potentially worth $3.6 million.

“Instead, equity awards equal in value to the grant of 400,000 stock options that otherwise would have granted to Mr. McCollough were set aside for ‘Chairman’s awards’ to individuals who have the potential to make significant contributions to the achievement of the company’s performance goals,” the retailer’s compensation committee wrote in the May 15 SEC filing.

Richmond-based Circuit City, the nation’s No. 2 chain of consumer electronics stores, gave McCollough the same salary: $975,000. And it trimmed his bonus to $1.1 million in the fiscal year ended Feb. 28 from $1.5 million a year earlier.

With McCollough’s compensation declining, new CEO Philip J. Schoonover significantly out-earned him in fiscal 2006. Schoonover, a former executive at rival Best Buy Co. Inc., saw his total compensation rise 36 percent to $7.6 million in fiscal 2006 from $5.6 million the prior year.

Schoonover, who became Circuit City’s chief executive in March, received a salary of $716,000 in fiscal 2006. He got $230,000 the prior year, but he was not at Circuit City for the full year.

His bonus dropped to $705,000 from $1.2 million — but that reflected several factors, including a large sign-on bonus in fiscal 2005 and a higher salary base that followed his promotions.