LONDON -- Martha Stewart agreed to have her annual pay cut by 10 percent as the company she created struggles to curtail losses amid a shift from publishing and TV.
Martha Stewart Living Omnimedia Inc. changed the compensation to $1.8 million for its 71-year-old chairman as part of an option in a July 2012 agreement that extended her employment until 2017, according to a filing Wednesday. Her annual license fee was also trimmed by $300,000 to $1.7 million, and the board replaced an old expense policy that reimbursed her for chauffeur, Internet and home-security services. It didn't say what the new expense policy would cover.
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In the past year, the New York-based company has suffered from slumping advertising sales at its magazines and declining broadcasting revenue following the cancellation of "The Martha Stewart Show." Martha Stewart Living, which is trying to focus more on its merchandising business, is also seeking a permanent chief executive officer.
Martha Stewart Living, which posted a net loss of $3.27 million in the first quarter after losing $56.1 million in 2012, said in the filing the changes in Stewart's contract are consistent with its plan to return to profitability.
The company has in the past 18 months been embroiled in a lawsuit brought by Macy's Inc. The department-store chain, which has sold Martha Stewart-branded home goods since 2007, sued after rival J.C. Penney Co. took a stake in Martha Stewart Living, saying it had the exclusive right to sell items in categories including bedding and cookware.
Martha Stewart Living climbed 3 percent to $2.41 at the close in New York. The shares have dropped 1.6 percent this year, compared with a 13 percent increase for the Standard & Poor's 500 Index.