May 29, 2003 2 min read

CAMP HILL, Pa. (AP) – Rite Aid Corp.’s top two executives received bonuses of $2 million apiece last year, the company disclosed in papers filed with the Securities and Exchange Commission. The executives – chairman and chief executive Robert G. Miller and president and chief operating officer Mary F. Sammons – also received salaries and deferred compensation totaling more than $1.2 million each during the fiscal year that ended March 1, the company said in annual proxy statements filed Tuesday with the SEC.

Miller and Sammons, formerly with Kroger Co., were hired in December 1999 to turn around Rite Aid, which was struggling financially amid allegations that its former management team had falsified accounting statements to drive up the stock price. In July 2000, the new managers restated earnings downward by $1.6 billion.

Sammons is scheduled to succeed Miller as CEO on June 25. Miller will remain as chairman of Rite Aid, the nation’s No. 3 drug store chain.

Miller’s bonus represented a fourfold increase from the $500,000 bonus he received in fiscal 2002. But in that year, he also received special compensation of more than $6.7 million, much of it related to a severance dispute between him and Kroger. He would have to repay Rite Aid any severance amount that he receives from Kroger if his lawsuit is successful.

Sammons received a $337,500 bonus in fiscal 2002 and more than $2 million in special compensation stemming from a similar severance dispute with Kroger.

In addition to their salaries and bonuses, Miller and Sammons last year each received options for 500,000 shares of Rite Aid stock that will vest over four years and carry an exercise price of $2.10. Rite Aid stock was at $3.67, down 1 cent, in morning trading on the New York Stock Exchange.

Rite Aid’s previous chairman and chief executive, Martin L. Grass, is under federal indictment on federal fraud and conspiracy charges. Grass and two others, who have pleaded innocent to various crimes, are slated to go on trial June 9.