Hooker to end employee stock program |
|
|
|
Published
:
Mon, 29 Jan 2007 15:57
|
MARTINSVILLE, Va. (AFX) - Hooker Furniture Corp. on Monday said it stopped its stock-based retirement plan because the costs got prohibitive as the company changed its focus and reduced its payroll.The move will cost Hooker a one-time charge of $18.4 million, but the company expects to save at least $3.4 million per year.Hooker used to be a domestic wood furniture manufacturer with more than 2,000 employees, but has since become a marketing and logistics company for the home furnishings sector. It now employs about 1,000 and recently announced plans to cut another 280 jobs when it closes its last manufacturing facility in late March.With a higher share price since the option plan's inception in 2000 and fewer employees, the costs as a percentage of payroll rose 'to a point we believe is significantly higher than industry average,' the company said.The plan averaged 7.5 percent of payroll from 2004 through 2006, but the company expected the payments would have ballooned this year. Hooker plans to roll over each participant's account balance to a 401(k) plan, which will become the primary retirement vehicle for the company's employees.Hooker Furniture shares fell 16 cents to $14.85 in early trading on the Nasdaq.Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
|
|
|
|
Print this Story
Hooker Furniture to close plant in Va. 