Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-05
BONUS WAR ENDED
WITH COMPROMISE
Stockholders of Bethlehem
Agree to Accept New Schwab
Compensation Plan.
speciaI pispatch to The Star.

NEW YORK, July 1.-THE war be-
tween the stockholders and the manage
ment of the Bethlehem Steel Corpora
ton over the payment of huge bonuses
to executives came to a peaceful end
ing with a slim victory for the stock
holders. Stockholders brought suit last
January for the refunding to them OF
$36. 100000 distributed as bonuses to
high officials of the company in the
last few years. The management sub
mitted q new plan at the meeting
Thursday and the stockholders dropped
the suit.
The new plan is a compromise be-
tween the views Of the stockholders and
the principal officers and directors. the
most important change will be that
the bonuses will be paid after all other
expenses and write-offs. instead OF be-
fore certain charges such as deprecia-
ton, deplstion and obsolescence. These
charges amount to about $15,00o,00O .
year.
It is estimated that the total distribu-
ton to officers in any one year would
be reduced by about 81 ,200,0 900. In the
last three years bonus payments have
averaged about $2,5o0.000 annually. In
1929 they were $3,425.306.
Fancy Salaries.
A serious question arises in business
as to Just how much one or two doni-
nant characters are worth to cor
poration. Charlss M. Schwab contends
that the right man may well be worth
81 .000, 900 q year or more. Elliott G..
McDougall, director and former preSi-
dent Of the Marine Trust Co., Of Buff
falo and one Of the opponents Of big
bonuses to captains Of industry. de-
clares that the day Of fancy salaries
and high wages is past in industry.
Mr.. McDougall says that salaries and
wages come from sales and they are no
small part Of the expenses that increase
prices. Business is dull, he says, be-
cause many prizes are too high for the
present purchasing power of the Ma
ton, and holds that expenses must be
cut until sales increase.
A group Of minority stockholders OF
the American Tobacco Co. showed dis
content over the bonuses paid to George
W. Hill. president, and other officials,
and in March Of this year court action
was started to block the sale of the
company's stock to officers and en-
ployes. It was argued that the stock
subscription plan amounted to a bonus
to officials and employees Of the COM
pany Of sc, 1000, 900 or moe. The man.
agement was supported in its plan by a
substantial majority Of ;ockholders.
Grace's Bonus.
Under the company's stock subscrip-
ton plan Mr.. Hill received 13,40O shares
Of stock, at $25 a share when 1t was SELL
ing the market at 500 a share, the
equivalent Of more than 81 200, 900. And
the five vice presidents received 1885
shares. This was In addition to cash
bonuses and salaries. It was indicated
that Mr.. Hill may have received more
than 81 5000 in cash, bringing his TO-
tai compensation with the stock allot-
ment to more than $4,000 This is
a nice cut In on the prosperity Of the
company last year.
Eugene r. Grace, president Of the
Bethlehem Steel Corporation, received q
cash bonus Of between 100000 and
100000 last year in addition to his
salary. In 1929 his cash bonus ex-
ceeded 81 100000
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