DETROIT - Chrysler Corp. was less profitable in 1997, and that meant lower bonuses for its top five executives.
Chairman Robert Eaton received a $3 million bonus for 1997, down from $4.5 million for 1996. Vice Chairman Robert Lutz received a $1.6 million bonus, down from $2.8 million in 1996.
The annual bonuses are based on product quality, customer satisfaction, profitability, return on sales and other goals.
'We were less profitable in 1997 than in 1996, although it still was a very good year for us,' said Steve Harris, vice president of communications.
Chrysler posted net income of $2.8 billion for 1997, down from $3.5 billion in 1996.
A month-long strike at Chrysler's Mound Road engine plant in Detroit plus the launches of the new Dodge Durango sport-utility, the Dodge Intrepid and the Chrysler Concorde contributed to lower earnings for 1997, Harris said.
Eaton earned a total of $4.9 million in 1997, which includes salary, savings plan, bonus and other annual compensation. That was down from $6.2 million in 1996.
In addition, Eaton earned $1.2 million in 1997 from a long-term performance plan, down from $2.1 million in 1996. Each of the top five executives earned less long-term performance pay and received lower bonuses in 1997 than in the previous year.
The lower bonuses and long-term incentive pay had nothing to do with the quality of Chrysler cars and trucks, Harris said. In fact, he added, Chrysler hit its internal target of 20 percent improvement in quality in 1997.
'This is not a quality-related thing,' Harris said. 'The compensation committee felt it was appropriate to award less because profitability was down.'