ITALY: Executive payments help cut Ferrari net profit - report
Ferrari SpA made a net profit of 21.6 million euros ($US22.9 million) in 2002, 54% less than the 47 million euros (US$49.8 million) reported for 2001, Associated Press (AP) said.
Ferrari, 56%-owned by Fiat SpA, boosted group sales 14.1% to 1.2 billion euros ($1.27 billion) as unit sales rose 22.3% to 7,536, including 3,300 Maseratis, 883 of which were sold during the brand's first full year in the United States, the AP report said. Consolidated operating profits rose 13.7% to 70.5 million euros ($74.7 million).
According to AP, the drop in net profit was due primarily to one-time bonuses to two individuals, including an 18.2 million euro ($19.2 million) payout to Ferrari chairman and chief executive Luca Cordero di Montezemolo and a 3 million euro ($3.2 million) bonus to Jean Todt, director-general of Ferrari's Formula One racing team. Those payments were made to recognize the two men's contribution to the "company's prestige and value," Ferrari said, according to AP.
AP said Ferrari boosted its research and development spending to 23% of sales, amounting to 283.4 million euros ($300.4 million) compared with 225.3 million euros ($238.8 million) in 2001.