WASHINGTON – Martha Stewart Living Omnimedia Inc. (MSO) will continue to pay founder Martha Stewart a salary of $900,000 a year under a five-year employment agreement reached last week, according to a Securities and Exchange Commission filing.
Stewart, whose titles will be founder and chief editorial and media director of the New York company under the new contract, also is eligible for annual bonuses of from 55 percent to 150 percent of her base salary, the company said.
In 2003, Stewart received a $900,000 base salary, and a bonus of $500,000.
Following her conviction on obstruction of justice and other charges related to an ImClone Systems Inc. (IMCL) stock sale, Stewart this week was given permission by a federal judge to begin serving her jail term as quickly as possible. The homemaking maven is scheduled to begin a five-month prison term in a federal facility Oct. 8, and later is slated to serve five months of home confinement.
Stewart won't receive salary or bonus while she is in jail, but will be paid while she is serving the home-confinement portion of her sentence, according to Thursday's SEC filing. She will continue to be covered by Martha Stewart Living's benefit plans while in prison, it said.
Stewart will be paid $100,000 a year in "non-accountable" expense allowances, payable in a lump sum when she is released from prison and on each subsequent anniversary, according to the filing.
Stewart already has received a $200,000 payment under the employment agreement, "in consideration of the continued services of the founder as on-air talent for television and radio programs of the company," the filing said.
In connection with the new contract, the company also agreed to pay Stewart at least $500,000 a year for use of her properties for TV and magazine shoots, compared with $2.5 million she received in 2003. The company said the revised payment is based on "current expectations of usage of the properties over the next three years."
Stewart's base salary is subject to annual review, and may be increased at the discretion of the company's board.
Under the new contract, Stewart is entitled to perquisites on terms no less favorable than those provided under her prior contract. For example, according to the filing, Martha Stewart Living will provide her with cars and drivers to be used at her discretion and will reimburse her for business, travel and entertainment expenses.