September 10, 2008, 12:00 AM

HSN executives earned $2.4 million in combined base pay in 2007

HSN Inc. paid its top executives a total of $2.4 million in salaries last year and $980,000 in incentive bonuses. CEO Mindy Grossman in 2007 earned compensation of just over $2.1 million.

HSN Inc., the former IAC/InterActiveCorp TV and web retailing business unit that’s now a public company, paid its top executives a total of $2.4 million in salaries last year and $980,000 in incentive bonuses.

The compensation totals, included in HSN’s most recently filed S1 registration, shows that CEO Mindy Grossman in 2007 earned total compensation of just over $2.1 million, including a base salary of $1 million, incentive bonus of $500,000, stock awards of almost $500,000 and $128,178 in other compensation. Following Grossman, Mark Ethier, executive vice president and chief operating officer, and William Lynch, executive vice president in charge of, marketing and content, earned compensation packages of around $1.3 million and $842,000, respectively.

With a base salary of $400,000, Ethier also earned a bonus of $100,000, $819,620 in stock awards and $7,750 in other compensation. Lynch was paid an annual salary of $356,731, a $150,000 bonus, $129,503 in stock and other compensation of $205,949.

HSN chief financial officer Judy Schmeling was paid $387,500 in salary, $120,000 in bonus, $681,413 in stock-related compensation and other compensation of $7,750. Another executive vice president, James Warner, who also works as HSN general counsel, earned base pay of $259,687, a $110,000 bonus, $153,482 in stock awards and other compensation of about $41,000.

In the event that Grossman, who joined IAC in 2006 from Nike Corp., is terminated with cause or for resignation with good cause, she is eligible for a severance package of about $3.3 million, according to HSN’s S1 statement, which is required for companies wishing to sell stock or debt publicly that have not been regularly reporting to the Securities and Exchange Commission. Ethier and Lynch are eligible for severance packages worth $3.7 million and $1.6 million, respectively. In the event of employment separation, Schmeling is eligible for a package worth $2.7 million and Warner $800,577 in related compensation.

In the second quarter ended June 30, HSN, No. 25 in the Internet Retailer Top 500 Guide, posted web sales of about $154.8 million, compared with web sales of about $128.7 million a year ago, an increase of about 20.3%. The web sales number is for its total Internet demand. Overall HSN in the second quarter recorded an operating loss of $271.9 million on sales of $695.9 million vs. year-ago operating income of $34.8 million on revenue of $681.5 million. The operating loss reflects a $300 million impairment charge related to goodwill and intangible assets and lower gross margins in a highly promotional retail environment, says HSN.

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