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Novell exec bonus tops salary

CEO Eric Schmidt reaps success of software firm's revenue growth and stock run-up.

Novell's chief executive landed a bonus larger than his yearly salary last year, as he steered the troubled software company to sequential revenue growth and profits, according to a Securities and Exchange Commission filing today.

Eric Schmidt, chairman and CEO, earned $602,308 in salary last year, with an additional cash bonus of $619,420. No options, however, were handed out to Schmidt.

Last year, Novell posted earnings of $102 million, or 29 cents per share, on revenues of $1 billion. That compares with losses of $78 million, or 22 cents a share, on revenue of $1 billion in the previous year. The loss, however, was due in part to costs associated with a major restructuring at the Utah firm.

Over the last three quarters of 1998, Novell posted consecutive revenue growth. The company's stock has about doubled in recent months, from around 10 at the end of last year to nearly 20 in recent weeks. Novell closed at 19.125 today.

Schmidt, like two of his top executives, received his first full-year of salary last year, after having joined the company in 1997.

Christopher Stone, senior vice president of strategy and corporate development, earned $332,943 in pay and a bonus of $278,204--of which $75,000 was part of an earlier sign-on bonus. John Slitz Jr., senior vice president of marketing, received $333,570 in salary last year, with a $254,464 bonus that included $50,000 for a prior sign-on bonus.

Meanwhile, as shareholders gear up for the annual meeting in April at Novell's headquarters, one investor is looking to fight Novell's board on the issue of maintaining an anti-takeover policy, known as a poison pill.

The investor, Martin Glotzer, wants shareholders to be given a chance to vote on whether Novell should maintain its practice of a poison pill--which dilutes the stock should a hostile takeover attempt occur.

"While management and the board of directors should have appropriate tools to ensure that all shareholders benefit from any proposal to acquire the company, the shareholders do not believe that the future possibility of a takeover justifies the unilateral imposition of such a poison pill," states Glotzer in his shareholder proposal.

Novell's board, however, contends that its 10-year-old shareholder rights plan, or poison pill provision, is the "best available means" of protecting the full value of the investment of the company's shareholders and does not prevent a fair acquisition offer.

Novell directors are asking shareholders to vote against Glotzer's proposal.