Horizon Lines, Inc. (NYSE: HRZ) announced that it is eliminating all perquisites for its four named executive officers, effective at the end of the year.
The Compensation Committee of the Board of Directors approved the decision after a comprehensive review in conjunction with a company-wide effort to eliminate perquisites at all levels of the organization as part of a broader, ongoing cost-reduction initiative.
"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."
The eliminated perquisites 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.
In addition to Mr. Raymond, executive officers for whom perquisites have been eliminated are: Senior Vice President and Chief Financial Officer Michael T. Avara; Horizon Lines, LLC President and Chief Operating Officer John V. Keenan; and Horizon Logistics Holdings, LLC President and Chief Operating Officer Brian W. Taylor. The four officers will receive base salary increases, effective January 1, 2010, to partially adjust for the elimination of the perquisites. However, no adjustment will be made for elimination of tax "gross-up" payments.
Separately, the company announced that James W. Down has voluntarily resigned from the company's nine-member Board of Directors, effective December 14, 2009.
Down served as a director of Horizon Lines since November 2006 and was the chairman of the Board's compensation committee. Down's decision to resign from the Board was based on his desire to pursue new business opportunities in the transportation sector, and did not result from any disagreement with the company on any matters relating to company operations, policies or practices.
The Board has named director James Cameron as the new Compensation Committee Chairman. It plans to fill the Board seat vacancy left by Down and currently is conducting a search.