Opinion ID: 147653
Heading Depth: 3
Heading Rank: 3

Heading: The February 15 Meeting - Reduction in Salary

Text: The Western Division was profitable the first month after Market Street’s acquisition of Major Mortgage. Thereafter, its branches began incurring expenses they had not incurred prior to the acquisition. As a result, the Western Division’s profitability declined and by year-end it had a net loss. On February 15, 2006, McBride and Mott met with a number of Market Street executives—Randy Johnson (President and Chief Executive Officer (CEO)), Donnell Smith (Executive Vice President), Steven Joyce (Senior Vice President of Strategic Planning and Development) and Deborah Renner (Vice President of Financial Operations)—to discuss the Western Division’s lack of profitability. Smith said the salaries in the Western Division were too high and needed to be reduced.5 Johnson agreed but said the salaries should be structured so they could be earned back if the Western Division met identified profit goals. Two days later, on the morning of February 17, Johnson and Smith agreed to reduce McBride and Mott’s salaries and discussed the level of reduction, settling on $85,000 for McBride. Johnson directed Smith to talk with McBride and Mott and to check their employment agreements for compliance before sending letters notifying them of the reduction.6 5 It is contested whether or not Smith specifically mentioned reducing McBride and Mott’s salaries. 6 According to Smith’s testimony, Johnson instructed him to check with the Human Resources Department to ensure compliance with employment agreements prior -6-