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RadioShack Picks Kmart Exec As Chairman/CEO

7/07/2006 09:16:00 AM Eastern

Fort Worth, Texas — RadioShack’s board has named ex-Kmart CEO Julian Day chairman/CEO of the consumer electronics chain.

Day, 54, joined Kmart as president/COO in March 2002 and became CEO in 2003, leading the chain out of bankruptcy. Prior to Kmart he was chief financial officer and COO of Sears, and prior to that was chief financial officer of Safeway.

Day succeeds Claire Babrowski, president/COO, who took on the role of acting CEO in February 2006 in the wake of the departure of CEO Dave Edmondson. He resigned several days after the company began an investigation into irregularities regarding his resume. RadioShack’s presiding board member acknowledged her work as acting CEO as someone “who stepped into the top position during a difficult time.”

In discussing Day’s background, Plaskett said, “His extensive knowledge of retail operations and his experience in revitalizing some of the great American retail brands make him the ideal person to lead RadioShack as we re-establish its pre-eminent position in the industry.”

In its most recent financial statement RadioShack’s income in the first quarter fell 85 percent to $8.4 million, down from $55 million during the same quarter last year. Sales for the quarter were up 3 percent to $1.2 billion, but comp-store sales were down 1 percent. RadioShack announced in February that it would close 400 to 700 of its more than 5,000 company-owned stores in the next 18 months. The chain operates more than 6,000 company and dealer stores.

RadioShack also reported Day’s compensation package, which includes a base salary of $1 million per year; participation in the company's existing bonus plans; stock option grants to purchase 4 million shares of RadioShack common stock, of which 2.5 million of the options are an employment-inducement award outside of RadioShack’s stock option plans that require public announcement in accordance with NYSE Rule 303A.08; 2 million option grants will vest in increments of one-fourth beginning on the first anniversary of the date of grant; and 2 million option grants will vest over four years based on performance targets related to increasing shareholder value.