Ex-KB Home CEO sentenced to house arrest
Bruce Karatz, the former chief executive of KB Home, received a sentence of five years probation for his conviction on charges relating to backdating stock options, according to an article in the New York Times .Eight months of the sentence must be served at home with an electronic monitoring bracelet.
The sentence, handed down Nov. 10 by a federal judge in Los Angeles, was a stunning defeat for federal prosecutors, who recommended six and a half years in prison. The government stated in a sentencing memorandum that home detention in the defendant’s “24-room Bel-Air mansion” would suggest “a two-tiered criminal justice system, one for the affluent … and a second for ordinary citizens.”
This did not go over well with Judge Otis D. Wright II, who described the memo’s language as “inflammatory,” adding: “To invite public ridicule and scorn on this institution, I think, is unspeakable.”
Wright also ordered Karatz to pay a $1 million fine and perform 2,000 hours of community service. His sentence followed the U.S. probation office’s sentencing recommendation.
Karatz, who led KB Home from 1986 to 2006, originally faced 20 felony counts. Prosecutors claimed he made more than $6 million by manipulating backdated stock options and then lying about it in regulatory filings
The executive’s defense attorneys countered that Karatz never intentionally violated any securities laws and handled his options the same way that hundreds of other companies did.
Operative word from NPD research: ‘Improving”
Port Washington, N.Y.-based researching firm The NPD Group reported that “pent-up demand” in the home improvement sector is on the rise and should help an industry recovery.
“There are signs of cautious optimism out there, especially among younger consumers, but price is still king,” said Mark Delaney, director of The NPD Group’s home division. “Clearly, pent-up demand is rising, and home improvement should help lead us in the recovery.”
The outlook for future DIY home improvement purchases is improving, according to the group’s recent research. The company’s Economy Tracker shows fewer people are planning to defer home improvement purchases — declining by 10 points year over year (three months ending Oct. 2010). Deferment is declining fastest among younger consumers.
Fewer people have deferred purchases over the last 12 months; however, this has increased among older consumers.
Regardless of age, consumers are looking for price and convenience when it comes to deciding which retailer to shop at for their hand tool purchases.
The company’s Consumer Tracking Service shows the following sales levels for the year ended October 2009 through September 2010:
• Wrenches: $363 million • Screwdrivers: $185 million • Hammers: $174 million
According to the 2010 Beyond the Boomers report, younger consumers, specifically those in Generation Y, show more opportunity for the hand tools market, with fewer items already owned, and a higher propensity for purchase, according to NPD Group.
Whirlpool celebrates 100 years
Benton Harbor, Mich.-based Whirlpool kicked off its yearlong 100th anniversary celebration today with a series of events, including company chairman and CEO Jeff Fetting ringing the closing bell at the New York Stock Exchange, the company said.
“It is appropriate for our company to begin this historic year with the New York Stock Exchange,” Fettig said. “Our company held its first stockholders’ meeting on Nov. 11, 1911. For 99 years, we have worked diligently to create long-term value for our shareholders, and it is only fitting that we would begin our 100th year in business right here on the trading floor of the NYSE. Whirlpool Corp. has had a remarkable and inspiring history.”
Fetting said the company first posted its stock on the NYSE 55 years ago.
“Whirlpool Corp.’s history has been guided by principles of integrity and perseverance ever since Lou Upton, Emory Upton and Lowell Bassford launched the first electric wringer washing machine in 1911,” Fettig said. “Through the Great Depression, two World Wars, and the rapid economic changes and challenges of more recent years, those ideals have guided our growth from a small washing machine company to a diversified, multibillion-dollar global operation, and they will continue to guide us into our second century.”
The company also held two groundbreaking ceremonies as part of the celebration, one for its new campus in the company’s headquarters city of Benton Harbor, Mich., and another for a new, 1 million-sq.-ft., LEED-certified manufacturing facility to produce premium cooking products in Cleveland, Tenn.
The company also announced additional events planned throughout the year to recognize the accomplishments of Whirlpool employees and partners around the world. The company said it will publish an official history of Whirlpool and launch an employee volunteerism program encouraging employees to contribute 100 volunteer hours. The company will also hold select facility tours for members of the media and corporate partners.