For Jeffrey J. Steiner, chairman and chief executive of Fairchild Corp., nearly $2.5 million in salary last year was just the beginning.
The company's notice for its annual meeting lists various dealings between Fairchild and Steiner family interests. There were payments by Fairchild for a chartered helicopter and a chartered aircraft and an apartment in Paris. There were family members on the payroll, interest-free loans outstanding to family members, and $258,000 for Steiner's personal expenses, later reimbursed. There were $1.7 million in advances on his retirement pay, according to the proxy statement, on top of almost $3 million the year before, though Steiner did not retire.
Fairchild's chairman and chief executive, Jeffrey J. Steiner, has headed the firm since 1985.
(Mitsu Yasukawa For The Washington Post)
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And there was a triple dip of sorts related to the sale of a subsidiary to Alcoa Corp. at the end of 2002. Steiner received $3.1 million, part of a golden parachute from Fairchild, without bailing out. He also received a $5.2 million bonus from Fairchild for his work on the deal. And he and his son Eric, president and chief operating officer, got a noncompete and consulting contract with Alcoa worth $5 million over four years.
In addition, the company reported that it had spent $5 million on Steiner's legal expenses as of October and had posted a bond of more than $1.5 million with a French court before Steiner was convicted of a criminal offense last year in France. Fairchild reported that he was given a suspended sentence of one year and was ordered to pay a fine of about $597,000. The judgment related to "unjustified use" of a French oil company's funds in 1990, Fairchild reported.
Meanwhile, Fairchild, once the maker of the tank-killing A-10 jet, reported a loss of $53.2 million in the fiscal year that ended June 30, 2003, and had lost money in three of the four previous years.
James D. Cox, a professor of corporate law at Duke University, said Steiner's arrangements look like "shameless overreaching" and "a raid on the Fairchild treasury."
"Where was the board and what were they smoking?" he said.
Board members from fiscal 2003 either declined to comment, did not return calls, referred calls to the firm or could not be found.
In a statement to The Washington Post, Fairchild said it "has complied, and continues to comply fully with all laws and regulations applicable to its business."
"Consistent with accepted practices of corporate governance, a majority of Fairchild's directors are independent of management," the company said. "Many of the issues raised by he Washington Post are dealt with by independent directors who are elected in the customary manner by Fairchild's shareholders."