Belk set to freeze pay, cut employee benefits

Belk plans to curtail executive compensation, freeze salaries and eliminate its contributions to employee retirement accounts for 2009 to help weather the recession, the 121-year-old Charlotte-based department store chain said Tuesday.

Corporate operations in Charlotte a;so will lose a small number of jobs because of a restructuring.

"The country is in a deep recession, and the timing of recovery is uncertain," Belk spokesman Steve Pernotto said. "A number of the key consumer indicators continue to worsen, and some have worsened considerably, like unemployment."

Belk is financially sound but wants to remain that way, without mass layoffs, Pernotto said.

As a result, the company's top 20 executives will not receive bonuses or stock awards for 2008 or 2009. However, the company's top five executives received no bonuses or stock for 2007, either, according to a regulatory filing; such payments are generally tied to performance. CEO Tim Belk received $1.6 million in total compensation that year, according to the filing.

All other bonus-eligible employees -- fewer than 600 out of 28,000 workers companywide -- will see their bonus-earning potential reduced by half.

No employees companywide will receive salary increases in 2009. The company also is suspending in 2009 both 401(k) matching contributions and those made to employee pensions.

Since last June, more than 30 large companies nationwide have announced plans to change or stop matching contributions to employee 401(k) plans, according to the Pension Rights Center, a consumer group dedicated to retirement security. Among those that have recently joined the list: Starbucks, Motorola, Sears, Eastman Kodak and FedEx.

The Belk moves take effect in February, the start of the company's fiscal year.

In addition to the pay changes, Belk is eliminating its central division in Charlotte. The division covers 70 stores in the Charlotte region and was previously headed by David Stovall, who left in early December to become CEO of Stein Mart.

Most local stores will be folded into the Raleigh-based northern division; the company will continue to have southern and western divisions, though the southern division will move from Jacksonville, Fla., to the Atlanta area. Each of the new divisions will contain about 100 stores.

The shift will affect 19 people in the central division; those employees will either move, work at another job locally or receive severance, Pernotto said. The company has also created additional regional manager positions. Paul Carver, who once managed the SouthPark Belk, will oversee the Charlotte area.

This story was originally published January 14, 2009 at 12:56 AM with the headline "Belk set to freeze pay, cut employee benefits."