BJ's CEO's salary, bonus, stock options

The chief executive of BJ's Wholesale Club received a higher salary and bonus and more stock options last year, in a pay package valued at $3.3 million, according to the Natick retailer's proxy filing yesterday.

Michael Wedge, who became CEO of the wholesale warehouse club in 2002, was awarded a 57 percent increase in his salary in 2003, to $634,135, and a $393,508 performance bonus, after receiving no bonus in the previous year, according to the company's proxy filed with the Securities and Exchange Commission.

Wedge also was granted 250,000 options to buy BJ's Wholesale common stock, valued at more than $2.3 million, said Compensation Design Group, a national executive compensation consultant based in New York. The stock grant is up from the prior year, when Wedge received 150,000 stock options.

Some analysts questioned why his base salary has surged even as his company's net income has remained relatively flat, making Wedge's total compensation gains disproportionate to the retailer's financial gains.

Wedge's total compensation -- salary, bonus, and options -- ''appears to be headed north ballistically while company performance declines," said Frank Glassner, Compensation Design Group's chief executive. ''It seems that there is a real disconnect between pay and performance here."

Michael Porter, a retail analyst for Morningstar Inc. in Chicago, said Wedge's pay remains ''in line with retail-industry averages." Amid intense competition from Costco Wholesale Corp. and Sam's Clubs, a division of Wal-Mart Stores Inc., BJ's revenues rose 15 percent last year, to almost $6.6 billion. Its stock price has also recovered, to $25 a share, after dropping sharply in early 2003 to below $10 a share.

But Porter said Wedge's base pay has risen sharply during the year, in contrast to a decline in the company's net income. BJ's net income was $102.9 million for the fiscal year ending January 2004, compared with $130.9 million in the previous fiscal year.

He said, ''Over time, if that top line of revenue is growing, eventually you want to see it make its way down" to net income, ''or it's growth without a purpose."

Calls to several BJ's Wholesale Club spokespeople were not returned yesterday, after the proxy was posted after 5 p.m. Stock in BJ's closed at $24.87 a share, down 33 cents yesterday.

Kimberly Blanton can be reached at blanton@globe.com.