Aftermarket

Navistar Executives Take Heat Over Bonuses

August 06, 2010

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The Securities and Exchange Commission has ordered Navistar CEO Daniel Ustian and former Chief Financial Officer Robert Lannert to pay over $2 million in bonuses back to the company.
The company's executives agreed to the order without admitting or denying the commission's findings related to accounting violations, as part of a global settlement.

Ustian will pay about $1.3 million in stock to Navistar, while Lannert consented to pay a little over $1 million in cash. The amounts represent bonuses the executives received during the period in question.

Others named in the order include Thomas Akers Jr., James McIntosh, James Stanaway, Ernest Stinsa and Michael Schultz.

The order finds that at times from 2001 through 2005, Navistar overstated its pre-tax income by about $137 million in several instances of misconduct.

"Fraud by certain individuals at a Wisconsin foundry and in connection with certain vendor rebates and vendor tooling transactions accounted for approximately $58 million of that total," the order said. "The remaining approximately $79 million resulted from improper accounting for certain warranty reserves and deferred expenses."

The SEC also issued a separate settled order Thursday involving Mark Schwetschenau, Navistar's former controller.

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