Ex-CEO at Michael Baker Corp. receives $1.1M in severance
Bradley Mallory, who recently stepped down as CEO of Michael Baker Corp. at the board's request, received a separation package worth more than $1.1 million, according to a securities filing.
Mallory, a former PennDOT secretary, received a cash payment of $430,498 on Dec. 31. He received 28,362 company shares under a long-term incentive plan that were worth $707,065 on that date.
The engineering and construction company based in Moon Township has drawn shareholder criticism of late — and even a hostile takeover bid last month. But a longtime former CEO of Baker said such criticism is unwarranted.
“Have the critics seen what's going on in the economy?” said Richard Shaw on Tuesday. Shaw is one of four CEOs at the company since 1994.
“The professional services market is primarily dependent on state and federal budgets,” said Shaw, who served as Baker's CEO for about 13 years in four stints between 1984 and 2008.
“Some peers have done well and some have done poorly. It depends on the make-up of your work and the source of your revenue,” said Shaw, who remains a board director. He noted the bulk of Baker's work comes from the public, not private, sector.
“It's a different economy now than it was” when Shaw was CEO, he said.
Shaw, who remains a Baker shareholder, ruled out returning to the helm fo a fifth time.
Michael Baker employs 3,000 people in 100 offices nationwide, including 725 people in Western Pennsylvania.
Meantime, Baker's independent directors this week began weighing the company's strategic options in light of a $24.25-a-share cash takeover offer it received from private equity firm, DC Capital Partners.
The Alexandria, Va.-based firm, which owns 5.2 percent of Baker, proposes to merge it into an engineering company that DC Capital controls. The firm and other shareholders say Baker has underperformed relative to industry peers.
Baker shares closed at $25.11 yesterday, up 21 cents.
Mallory left his post as president, CEO and director at the request of the board on Dec. 12. He had led the company for four years. Mallory joined Michael Baker in 2003 as a senior vice president after serving eight years as PennDOT secretary in the Ridge and Schweiker administrations. He was named CEO in February 2008.
Mallory could not be reached.
Asked about Mallory's departure at the company's urging, Shaw merely said it was a board decision.
“I have the utmost respect for Brad Mallory, both during his years as (Pennsylvania) secretary of Transportation and his years at Baker,” Shaw added.
Replacing Mallory on an interim basis are Michael Zugay, chief financial officer, and H. James McKnight, chief legal officer. Each of them is receiving a base salary of $377,062, said the filing.
Thomas Olson is a staff writer for Trib Total Media. He can be reached a 412-320-7854 or at firstname.lastname@example.org.