Tampa Bay Times from St. Petersburg, Florida • 32

ts is qiyestioiniedl 016 off CEO pi cies in place to ensure the independence and objectivity of all our consultants, including executive compensation consultants. In addition, Hewitt adheres to strict confidentiality requirements and a strong Hewitt code of conduct." Because much of what goes on in compensation consulting stays in the hushed confines of corporate boardrooms, the roles of these advisers in determining executive pay have been hidden from investors' view. This is the secretive, prosperous and often conflicted world of compensation consultants, who are charged with helping corporate boards determine executive pay that is appropriate and fair, and who are often cited as the unbiased advisers whenever shareholders criticize a company's pay as excessive. It is a world where consulting fees can reach $950 an hour, rivaling those of the nation's top lawyers. And it has grown into a Verizon chief Ivan Seidenberg got a 48 percent raise in 2005, while earnings fell 5.5 described the compensation adviser as an "independent outside consultant" In this year's proxy, the word "independent" is missing.

The Securities and Exchange Commission has proposed rules on compensation disclosure that would require compensation consultants to be identified. But the rules would not force companies to disclose details of other services provided by the consulting firm or its affiliates. The potential for conflict is reminiscent of that among auditing firms that were performing lucrative consulting services related to information technology and tax issues for the same companies whose financial results they were certifying. When the SEC required companies to disclose how much they were paying in consulting and audit fees, the industry was compelled to separate these businesses. "Auditors' giving companies tax advice while acting as their independent auditors was clearly crossing the line into bad corporate governance in the cases of Enron and Hollinger," said Paul Hodgson of the Corporate Library.

Referring to pay consultants, he added: "The perception has been growing that it is better that there be a clear line of distinction between the people the board hires and the people hired by the with the help of an "outside consultant" who reports to the committee. The independence of this "outside consultant" is open to question. Although neither Verizon officials nor its directors identify its compensation consultant, the New York Times reports that people briefed on the relationship say it is Hewitt Associates of Lincolnshire, 111., a provider of employee benefits management and consulting services with in revenue last year. Hewitt does much more for Verizon than advise it on compensation matters. Verizon is one of Hewitt's biggest customers in the far more profitable businesses of running the company's employee benefit plans, providing actuarial services to its pension plans and advising it on human resources management According to a former executive of the firm who declined to be identified out of concern about affecting his business, Hewitt has received more than a half-billion dollars in revenue from Verizon and its predecessor companies since 1997.

In other words, the very firm that helps Verizon's directors decide what to pay its executives has a long and lucrative relationship with the company, maintained at the behest of the executives whose pay it recommends. Experts say conflicts of some large consulting firms help explain why executive pay is often hard to understand. Nw York Tlm For Ivan Seidenberg, chief executive of Verizon Communications, 2005 was a very good year. As head of the telecommunications giant, Seidenberg received in salary, bonus, restricted stock and other compensation, 48 percent more than in the previous year. Others with a stake in Verizon did not fare so well.

Shareholders watched their stock fall 26 percent, bondholders lost value' as credit agencies downgraded the company's debt and pensions for 50,000 managers were frozen at year's end. When Verizon closed the books last year, it reported an earnings decline of 5.5 percent And yet, according to the committee of Verizon's board that determines his compensation, Seidenberg earned his pay last year as the company exceeded "challenging" performance benchmarks. Seidenberg's package was competitive with that of other companies in Verizon's industry, shareholders were told, and was devised substantial industry where there is little disclosure and transparency about how executive pay is determined. Marc Reed, executive vice president for human resources at Verizon, declined to identify the company's compensation consultant as do many other companies noting that the Securities and Exchange Commission did not require it. "We understand the potential perception issue," he said, "but we think it's important to honor the confidentiality of our advisers, and we have always ensured there have been no conflicts of interest." Suzanne Zagata-Meraz of itt issued the following statement: "Hewitt Associates has strict poli- picked VP of human relations and a consultant from the ever-accommodating firm of Ratchet, Ratchet Bingo all too often receives gobs of money from an ill-designed compensation arrangement" The potential for conflicts in consulting arrangements can be difficult to spot Even if the consultant is identified, the other work that a consultant's company performs for the compensation client is hard to plumb.

"I wish we could figure out how to flesh out the conflicts that pay consultants have in the same way we were successful in fleshing out the conflicts in Wall Street research," said Richard Moore, who as treasurer of North Carolina oversees $70-billion. "This is one of the last pieces that are pure unadulterated conflicts that neither the board nor the shareholder is well served by." The only reference to Hewitt Associates in any Verizon filing, for instance, is a letter sent by the company to institutional shareholders and attached to a 2004 proxy filing. The letter, written by a Hewitt official, details the supplemental executive retirement plan in response to a shareholder's proposal that would have required stockholder approval of any "extraordinary benefits for senior executives" at Verizon. Last year, Verizon's directors Verizon fromlD tions. The commission staff also wants one-day advance notice of new promotions through 2006.

Bright House, the Tampa Bay area's dominant cable company, considers Verizon's proposal a tribute to the success of the cable company's Digital Phone service, which it rolled out in 2004, Bright House spokes EARNINGS Media General Inc. The publisher of 25 daily newspapers in the southern United States including the Tampa Tribune reported a first-quarter profit after a big loss last year, though stock-option expenses and the publishing division's performance pulled down earnings. IstQtr Year Ago Revenue Net Income Per Share 28 cents Gannett Co. The country's largest newspaper publisher reported an 11.5 percent decline in profit for its first quarter as the company began expensing stock options and recording costs from its new newspaper partnership in Detroit IstQtr Year Ago Revenue Net Income Per Share 99 cents $1.05 Wal-Mart changes have ripple effect B.a -Miirr iin i ii Timet photo (2004) JAMIE FRANCIS Dr. Chris Baker, right, a Scripps Institute research associate, works in the institute's temporary home at Florida Atlantic University in St.

Augustine in September 2004. He is working with cells linked to mad cow disease. woman Kena Lewis said. Bright House has about 115,000 phone customers in Pinellas, Hillsborough, Pasco, Hernando, Citrus, Polk and Manatee counties, Lewis said. "We certainly do offer incentives," Lewis said.

"As great as (our phone service) has been, mere's a wide open market that hasn't tried it yet" Louis Hau can be reached at (81 3) 226-3404 or hausptlmes.com. Circuit City Stores Inc. The consumer electronics chain finished its fiscal 2006 with a flourish, reporting solid profit and sales growth and internal improvements for the fourth quarter and the year. 4thQtr Year Ago Revenue Net Income Per Share 80 cents 45 cents Year Year Ago Revenue $1 0.47-bil Net Income Per Share 77 cents 31 cents Harley-Davidson Inc. The motorcycle manufacturer said its profit rose 3 percent in the first quarter, in line with Wall Street expectations, helped by motorcycle sales growth in the United States and abroad.

IstQtr Year Ago Revenue Net Income Per Share 86 cents 77 cents Nevertheless, corporate governance experts say, the conflicts bedeviling some of the large consulting firms help explain why in good times or bad, executive pay in America reaches dizzying heights each year. Warren Buffett, the chief executive of Berkshire Hathaway and an accomplished investor, understands the troubling contributions that compensation consultants have made to executive pay in recent years. 'Too often, executive compensation in the U.S. is ridiculously out of line with performance," he wrote in his most recent annual report "The upshot is that a mediocre or worse CEO aided by his hand C5S- H'JB fc It. Neither Tampa, University of South Florida nor Burnham officials were available to comment on whether the Tampa area has made a bid for the Burnham campus.

Orlando officials estimated Burnham's potential economic spinoff could total 3,600 employees within 15 years. In Chicago, Bush touted his proposed $630-million technology development package, being considered by the Legislature, which includes venture capital for biotech firms. At the same time, he steadfastly opposed embryonic stem cell research in Florida. Several states, including California, Connecticut and Illinois, have earmarked millions in state money to attract stem cell research. In the state rankings, many people credited Scripps with pushing Florida up from No.

11. But Donn Szaro, Ernst Young's global health sciences leader, thinks the answer for Florida's upward movement is more complex. "I'd love to jump on the Scripps bandwagon, but I don't think they caused this," said Szaro, who is a board member of the Florida Research Consortium. "I think this was a tripartite group of academics, entrepreneurs and venture people." Information from Times wires was used in this report Kris Hundley can be reached at hundleysptimes.com or (7Z7) 892-2996. Tech Data's financial performance could use a spark.

Although revenues rose 3.8 percent last fiscal year, net income was down 83.6 percent in large part because of restructuring costs for European operations. The company operates on a gross profit margin of about 5 percent so even a small percentage improvement has the potential to create a big effect Raymund, 50, has effectively led the company founded by his father since 1982. Although chairman and chief executive, he has said he plans to give up the CEO role when a successor is chosen. "I want to stay involved in the company. But I'm getting fatigued, and I want to do other things with my life," he said last month.

Halan Huntlay can bt raachad at hhuntlyprtlm.com or (727) 893-8230. tory to improve store interiors. Less inventory also will help reduce the company's asset base, in turn boosting its return on investment a key metric that drives stock price, analysts said. Because many suppliers count Wal-Mart as their largest customer, any change it makes will naturally have the biggest impact "It's challenging for everyone," said Michelle Bogan, retail strategist at Kurt Salmon Associates, a global consulting firm. "Whenever Wal-Mart scales back, it is hard for suppliers to be flexible enough to respond quickly.

The volumes are big." That means slower sales for suppliers as they readjust production to meet fewer deliveries to Wal-Mart; it also entails having to rethink their product lines, perhaps focusing on specific packaging sizes that are the most popular. On March 13, which counts Wal-Mart as its biggest customer and is the maker of such products as Tide detergent and Pampers diapers lowered what it called an organic sales growth forecast for its fiscal third quarter, citing customer inventory reductions. Organic sales growth excludes the impact of acquisition, divestitures and foreign exchange. In 2005, sales to Wal-Mart accounted for about 16 percent of total revenue, according to Securities and Exchange Commission filings. No other customer represents more than 10 percent of its total sales, the filing said.

Wal-Mart's goal is to have its sales increases outpace inventory increases, the opposite of the company's trend in some recent quarters, said Bob Buchanan, a retail analyst at A.G. Edwards Sons. Philip Zahn, senior director at Fitch Ratings Inc. estimated that Wal-Mart is now turning its inventory over an average of 7.8 times a year, slower than 2002's 8.1 times; the higher the turnover, the faster goods are being sold. where are switching to The Worlds of Busch Gardens Africa.

The Tampa Bay location drops to a lower line. The Virginia park will be promoted as The Worlds of Busch Gardens Europe beyond its primary drive market Busch Gardens added Tampa Bay to its name and logo in 1998 to combat the arrival of Disney's Animal Kingdom, which has a similar mix of animals and attractions, about an hour's drive away, near Orlando. It also was an attempt to begin marketing the Tampa Bay area as a single market for tourists. Mark Albright can reached at albrlgrttptimo.com or (727) 8934252. AMoclatedPrsu NEW YORK As Wal-Mart Stores Inc.

looked across its operations recently to find ways of cutting costs, it found it had a problem that afflicts many businesses: too much inventory. So the world's biggest retailer is on a campaign to cut the amount of merchandise it buys, a move that's creating some short-term pain for a broad range of suppliers from consumer product makers Procter Gamble Co. and Spectrum Brands Inc. to cosmetic company Elizabeth Arden Inc. Wal-Mart declined to offer details of its strategy, which it announced in October and is now implementing.

But industry analysts expect it to affect all merchandise categories, from shampoo to toys and jeans. It does carry some risks for Wal-Mart If it isn't well executed, consumers used to finding their favorite toothbrush or detergent brand may be disappointed. Wal-Mart's spring cleaning comes as it struggles with slowing sales and disappointing profit growth in part because of higher expenses. Its stock price has fallen 6 percent over the past 12 months. Leaner inventory will help clear out store clutter and help Wal-Mart focus on specific brands and products that consumers want company spokeswoman Gail Lavielle said.

She described the company as looking at inventory on "a case-by-case basis," but declined to comment further. Analysts speculated that Wal-Mart will look at ways to eliminate minor brands and not carry as deep a selection of certain items. For example, it might stock only the most popular brands of batteries, or may not carry as many styles of black jeans. Customers shouldn't see any major changes, though they might notice the selection isn't quite as wide as it was previous-ly. Wal-Mart is expected to use its savings from reduced inven Busch fromlD one in Virginia." The Tampa park, which has more than 2,000 animals in addition to rides and shows, has had an African theme since the early 1970s, when it grew out of a free bird, beer sample and botanical garden next to an Anheuser-Busch Cos.

brewery. It was promoted then as Busch Gardens, The Dark Continent The park in Williamsburg, which has a small zoo component is a takeoff on European architecture and culture that offers rides and shows. Busch Gardens Tampa Bay will continue to be the name used locally. But logos else DIVIDENDS Biotech fromlD Bush wooed Scripps to Florida in 2003 with the promise of $369-million in state money to underwrite the research group's operations for seven years. Palm Beach County committed $200-million to build a Scripps campus on a former orange grove known as Mecca Farms.

When that site faced legal delays and commissioners proposed building Scripps on a parcel in Jupiter, a new contract was required. Now Scripps refuses to agree to a stipulation allowing the county to sue if the institute does not maintain 545 jobs over 30 years. With the deadline for a revised contract less than a week away, county officials were proclaiming an impasse while Scripps officials weren't talking. Bush, interviewed at the BIO conference in Chicago, declined to get drawn into negotiations between Scripps and Palm Beach County, which have been fraught with delays. "They know what they need to do," the governor said.

All the delays with Scripps appear to have done little to dampen Florida's enthusiasm for biotech research. Orlando and St. Lucie County have reportedly put together bids each valued at more than $90-million to attract an expansion of the Burnham Institute, another La Jolla biomedical research center. Passion fromlD burg. Raymund said the culture he hopes the company can create will emphasize integrity, respect teamwork, honoring commitments, forming partnerships with customers and suppliers, coming up with solutions instead of making excuses, and creating an environment of continuous improvement How will it be done? Raymund said communication will be the first step.

Important principles will be stressed in posters and printed on employee identification badges. Managers will get coaching in the principles, which will become a basis for employee evaluations, he said. RKCUUM Shore Financial Cp .07 4-24 5-1 Benetton Group I .8296 5-17 5-25 Supervalu Inc .1625 5-31 6-15 Nac'l Tele Vnz 2.2819 4-18 TSRIik .08 4-26 5-U Unlbanco Brasll .1779 4-21 5-8 niimm. Farai anoint MS AM. WTUAl rgNOVlTTi Citlgp InvCorpLn .08 4-25 4-28 f9 51C Colonial Intmk Ik .052 4-17 5-1 Bank of S.Carolina 515 EatonVan TxAdvDIvInc .1225 4-21 4-28 nm.r.rnmm EVFItgRatelneoTr .127 4-21 4-28 someracomms EVSenlorFltgRateTr .127 4-21 4-28 EatonVan ShrtDurDvsf 4-21 4-28 a EatonVan TfldvGIDvl .116 4-21 4-28 Mercantile Bank Cp .13 5-17 6-9 EatonVan TuAdvGIDvOp .132 5 4-21 4-28 Utd Techs Cp .265 5-19 6-10 Ellsworth Fd ln .07 5-16 5-30 REDUCED Enhanced Govrnmnt .1167 4-21 4-28 Education Realty Tr .2975 4-25 5-9 Global Hi Inco Dlr .1116 4-20 4-28 Mills Corp .251 4-21 5-1 Insured Muni Inco .058 4-20 4-28 KMtl LehBro FstTrlnco .11 4-21 4-28 ADVOInc .11 4-21 5-5 LehBro FstTrlnco il 5-23 5-31 Ark Restaurants Cp .35 4-24 5-1 LehBro FstTrlnco .11 6-23 6-30 Caterpillar Inc .25 4-24 5-20 Managed HIYIdPlus .0475 4-20 4-28 Eaton Vance Cp .10 4-28 5-B Montgomery Str Inc .25 4-17 4-28 Equitable Resour .22 5-6 6-1 Strat Gibl Inco .0776 4-20 4-28 FNBBmpCA .15 4-28 5-15 t- payable Canadian funds.

NEW YORK CORPORATION BONDS IcrtCwca YH last CM londCanxn last Ol tadCmw TO list On BoriCwm TM Lrt On i i 1 in: ivrmai AMP 9.11 lt li US SMCrtlZWS 1M -1 f- if -i SKS1 fiiii-iji, tn I i 1 it 1 OMr'S 4WW 1 72 MmtLnei 7.1 94 -4 jH ami I P-ul TVA5W1 54 am A ET-PH Jinimif tmmmmmittlmmmfuM TVM7i33 ii a) 4 I i 'H ii ill ill U3NAt2M 71 1CVt -1 Mill ft DM07 tm I Mmdozt31 a Mt t' 'W FodCtM 7.0 (07 ttttMffl .10 Vt U.rt9W7 70 BVi Kara07ji12 72 100 PtMlMiil First Financial Group (nm I Tampa Sun City St. Petersburg I iMittfMi (813) 288-4646 (727) 456-1240 Largo Palm Harbor CZfl(0Apr (727)518-8333 (727)781-8393 Annual PmcnUncs Yield Depmlt amount suhfect to anllabllllly $20,000 Minimum Deposit PmaJt) formHywithdrawl Inamitlon I 'Prnmntkirul Incentrvei Included to obtain yMd.