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WASHINGTON—U.S. President George W. Bush said today 20 world leaders gathered here had agreed on a set of principles aimed at stabilizing the global economy and preventing future financial meltdowns.

But the outgoing president stressed in a statement that today’s historic meeting was the first in a series and he would now hand over the process to President-elect Barack Obama.

Emphasizing the need for a smooth transition, Bush wrapped up his statement at a historic downtown Washington conference centre by thanking journalists for covering his summit and ended with a simple, "Good-bye."

Today’s meeting was historic because of the attendance of 20 nations, including developing countries which had been shut out of recent economic summits.

The leaders agreed to strengthen transparency and accountability by toughening disclosure requirements on international financial transactions, requiring "complete and accurate" disclosure by firms of their financial condition and aligning incentives throughout the nations to avoid any excessive risk-taking which could cause problems to cascade worldwide.

The leaders will strengthen the oversight of credit rating agencies and financial markets, toughen their financial market regulations to prevent market manipulation and fraud, more closely co-ordinate national laws and financial regulations and modernize the International Monetary Fund and the World Bank to give more power to the developing nations at the table here.

He said the international financial institutions were still operating based on the economy of 1944, and their policies need to be updated for today’s global economy.

That was a reference to the 1944 Bretton Woods conference which established both institutions.

Bush reiterated that he was a "free market person” but not when he is told his country could have been entering a depression deeper than the Great Depression.

He also said the leaders found consensus on trade barriers, agreeing that they would resist the urge to build economic walls and retreat into protectionism.

"It makes sense to come out of here with a firm action plan, which we have, and it also makes sense to say to people that there is more work to be done, and there will be more meetings," Bush said.

One meeting, he said, cannot turn the global economy around.

"The declaration should give us all hope, and I would hope would give the markets some reassurance," Prime Minister Stephen Harper told a news conference, referring to the so-called G20 countries’ communique following the end of their emergency summit.

Canada is in relatively good shape compared to other nations as it heads off the crisis, and will issue a financial update at the end the month.

The International Monetary Fund recently forecast that the Canadian economy will grow moderately over the next year and avoid falling into a recession.

Nonetheless Harper sounded a cautious tone Saturday as he addressed the media at the Canadian Embassy.

"There are going to be very tough adjustments that will have very real effects in the Canadian economy but we will continue to be pragmatic and flexible while maintaining good, long-run economic policies," said the prime minister, flanked by Finance Minister Jim Flaherty and Ambassador Michael Wilson.

"We will respond in a way that will minimize Canadians’ exposure to these problems and maximize our ability to come out of this in a strong position creditscore.com."

The G20 leaders, who meet again April 30 left Washington armed with a series of reforms to put in motion by the end of March.

"The big question is how do we establish good regulatory structure without destroying the incentive to innovate, without destroying the marketplace," Bush said Saturday outside the stately National Building Museum where the summit was held.

"Transparency is very important so that investors and regulators are able to know the truth."

Adding that the summit "is not going to solve the world’s problems," Bush said: "There is more work to be done."

Bush called for the emergency summit a few weeks ago in the face of the worldwide economic meltdown. It’s the largest meeting of its kind in more than a decade.

The meeting comes at an awkward time for Bush, a wildly unpopular lame-duck president who’s leaving office in two months when Obama is officially sworn in as America’s 44th president.

Obama has made it clear since his historic election Nov. 4 that Bush is still the president, and must remain actively involved in dealing with the crisis in the next few weeks.

Nonetheless, many of the officials who descended upon Washington for the summit had been clamouring for access not to Bush and his people but to the man who holds the real power in the U.S. capital – Obama.

The president-elect appointed two emissaries – one-time secretary of state Madeleine Albright and former Republican congressman James Leach – to attend on his behalf, reluctant to be seen as interfering during the waning days of Bush’s presidency.

Senior Canadian officials met with Albright and Leach early Friday, hours before Harper arrived in Washington to attend the extravagant White House dinner that kicked off the summit.

While the prime minister is opposed to a vast international regulatory system that would impose global rules on each country’s banking systems, he has strongly advocated the notion of "peer review" of every G20 country’s national financial regulations.

Harper said he was pleased to see that idea was embraced at the summit.

"There is an agreement to look at transparent assessments – independent transparent assessments – of financial regulatory systems, so that will happen," said Harper.

"Canada submitted to IMF assessments in the past, and as we told our American friends and others, we found those very useful in the past … so that has been recognized in the declaration."

Not far from the summit, a handful of protesters carried neon yellow signs that read: "Money for people’s needs, not bankers’ greed" and "Money for jobs, not for war and occupation."

The countries represented at the summit were the U.S., Canada, Argentina, Australia, Brazil, Britain, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea and Turkey.

Those countries and the European Union make up the so-called G20.

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When people make sacrifices in a tough economy, they usually don’t start with their health.

That’s one reason the health care industry, if not exactly recession-proof, seems one of the best able to endure the economic downturn.

St. Louis’ growing medical sector includes the area’s largest employer, BJC HealthCare, with 23,500 workers. Not only are local hospitals not experiencing layoffs, many will continue to hire skilled workers, said Dave Dillon, spokesman for the Missouri Hospital Association.

"There’s always going to be a demand for health care," Dillon said.

During economic downturns, sales of prescription drugs and medical devices tend to hold up better than nonessential goods, noted David Wyss, chief economist of Standard and Poor’s.

"Generally, you’re looking for things that are necessities, not luxuries," Wyss said. "People get sick and need medical care regardless of the state of the economy."

But recent earnings show that drug makers aren’t immune from slumping sales that have plagued their peers in the retail and auto industries. Pfizer, which employs 1,200 people in its labs in the St. Louis area, said last month that U.S. sales of its best-selling product, the cholesterol drug Lipitor, fell 13 percent in the last quarter as some financially struggling patients stopped filling their prescriptions.

"The typical safe harbors (for investors) have been pharmaceuticals," said analyst Steve Brozak of WBB Securities. "They’re no longer safe; they’re now the least bad choice."

Pfizer and Schering-Plough Corp. were able to offset weak revenue in the U.S. with higher sales abroad. But other companies, such as Merck & Co. Inc., have been less successful. Merck said recently it will cut 7,200 jobs after reporting sales declines.

Experts say pharmaceuticals are more vulnerable to economic cycles because employers have shifted more of the financial burden for care to patients, with higher copays and deductibles.

"With consumers having more cost-sharing in their benefits, you’re going to see a greater effect on their health care spending right away," said Paul Ginsburg, President of the nonprofit Center for Studying Health System Change quick pay day loan.

That means more uninsured or under-insured patients seeking care through hospital emergency rooms and other safety-net providers. Between 2000 and 2005, 125,000 people in Missouri went off employment-based health insurance, said James Kimmey, president and CEO of the Missouri Foundation for Health.

"If the recession leads even more employers to back down a bit from their current coverage levels, it could increase the uninsured pretty fast," Kimmey said.

The lagging economy and rising unemployment have made it harder for health insurers such as UnitedHealth Group Inc. and Humana Inc. to raise prices to offset higher costs and investment losses.

Health care companies least affected are those that sell inexpensive medical products directly to hospitals, bypassing cash-strapped consumers.

Becton, Dickinson & Co. and Baxter International Inc., for example, reported sharp profit gains for the most-recent quarter and boosted their full-year earnings estimates. Becton Dickinson specializes in syringes and surgical tools; Baxter sells drugs to treat blood and immune disorders.

"The products they offer aren’t high-tech things," said Aaron Vaughn, an analyst with Edward Jones. "They are health care staples that people need."

A focus on lifesaving medicine also is expected to reward makers of high-priced biotech drugs.

Genzyme Corp. and Celgene Corp., for example, have built businesses around niche drugs for life-threatening diseases. Health care investment firm Leerink Swann gives both companies an "outperform" rating, along with peers Amgen Inc., Biogen Idec Inc. and Gilead Sciences Inc.

POST-DISPATCH STAFF WRITER BLYTHE BERNHARD CONTRIBUTED TO THIS REPORT.

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Wal-Mart Stores Inc., with its emphasis on low prices and improved merchandise, is stealing market share from competitors and is well-positioned for the holiday season, CEO and President Lee Scott told investors Monday.

The company, nevertheless, is scaling back the growth of its namesake stores in the U.S. and focusing on remodeling existing locations as it responds to a tough consumer spending climate.

"It is clear in this environment that the customer is more cautious and more thoughtful about what they buy and they’re more thoughtful about when they buy it," Scott said in an address to analysts gathered on the first day of the company’s two-day investor meeting in Bentonville, Ark.

Nevertheless, he said, "We see this as an opportunity to widen our moat. … This is Wal-Mart time."

Eduardo Castro-Wright, president and chief executive of Wal-Mart’s U.S. division, told analysts that the company plans to open 191 stores in fiscal 2009 and from 142 to 157 stores in fiscal 2010. That compares to 218 stores opened in fiscal 2008.

As a result, capital expenditures will come in at $5.8 billion to $6.4 billion for fiscal 2009 and $6.3 billion to $6.8 billion in fiscal 2010. That’s down from the $9.1 billion the company had in capital expenditures in its last fiscal year.

Wal-Mart officials are expected to offer the capital expenditures forecast for the entire company on Tuesday.

Monday’s meeting featured addresses by merchandising executives who discussed how Wal-Mart will be emphasizing the price message in its advertising and in its stores this holiday season, while pushing for friendlier service, cleaner stores and faster checkout. Wal-Mart is rolling out Christmas shops, which feature wrapping paper and other decor, but will also be more aggressive in designating holiday gifts throughout the store.

Wal-Mart has found itself in the right spot as it pushes the right mix of merchandise and marketing to complement its renewed focus on price just as the economic slowdown worsened. The company has also focused on inventory management and has improved capital efficiencies http://paydayintime.com.

As a result, Wal-Mart (WMT, Fortune 500) shares, which had been in a funk for several years, rebounded starting in September 2007, rising about 50% to $64 in early September. However, the stock has lost about 17% of its value in recent weeks as the financial meltdown has intensified. Shares slipped $1.73, or more than 3 percent, to close at $49.67 on Monday, close to the low end of its 52-week range of $42.50 to $63.85 per share.

Meanwhile, cheap chic rival Target Corp. (TGT, Fortune 500) has fallen behind Wal-Mart because its heavy emphasis on nonessentials such as trendy clothes makes it more vulnerable to the spending slowdown. Target’s profits are also being squeezed amid rising delinquencies in store credit card payments. Its shares have lost half their value since a peak of about $70 in July 2007. They fell 23 cents to $32.69 on Monday, at the low end of the 52-week range of $63.86 to $30.45.

Wal-Mart officials noted that their company - considered a barometer of the pulse of the American consumer - continues to see firsthand how the mounting financial crisis, including tightening credit, is putting more strain on its shoppers. Castro-Wright noted that credit card payments as a percentage of total payments is down 7.4% so far in fiscal 2009. That means that customers are maxing out on their credit cards, says Castro-Wright. That’s a big reversal from the robust double-digit growth rates in credit cards over the past three year.

Wal-Mart noted that it’s focusing on expanding its store-label food business as shoppers look to save more money on their food bill amid soaring inflation. As part of the strategy, the company is reformulating 1,200 food items, including cold cereal, cookies and yogurt, from the 5,000 food items it tested to improve the taste. 

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Chrysler Canada says it is cutting its salaried, white-collar workforce by 25 per cent, or almost 240 jobs, as the downturn in the North American auto industry deepens.

In announcing a continent-wide reduction of staff and contract workers, the company’s Detroit-based parent said yesterday it would achieve the reduction through lucrative voluntary retirement incentives, buyout programs and layoffs during the next few months.

When the Canadian subsidiary completes the reduction, its salaried workforce will fall to about 700 – down 465 jobs or almost 40 per cent from five years ago.

Bob Nardelli, chair and chief executive officer for Chrysler LLC, said the "unprecedented decline" in the global auto industry meant the company needed to take the action to remain competitive.

Earlier this week, the company accelerated the closure of an assembly plant in Delaware and cut a shift at another plant in Ohio. Chrysler also slowed down output at its Windsor minivan complex this month by cutting one shift for two weeks and possibly three.

In the past five years, Chrysler Canada’s hourly-paid production workforce has dropped more than 1,000 jobs to 8,925. The company has eliminated a shift at its Brampton assembly plant and trimmed the Windsor workforce by a few hundred jobs.

Chrysler would not comment on how many contract workers it currently employs in Canada who also face an overall cut of 25 per cent.

People familiar with the latest incentive program said staff in the U.S. between 51 and 62 with 10 or more years of service who earn less than $100,000 annually can receive full retirement benefits and health-care credits. Selected staff between 53 and 62 who earn more than $100,000 can also qualify for full retiree benefits.

Furthermore, workers 60 or older with more than 10 years’ service can get $50,000 in cash, a $25,000 voucher for a new Chrysler model and 100 per cent in health-care credits internet payday loan.

The company will offer U.S. employees with less than 10 years of service a $50,000 cash buyout, a $25,000 vehicle voucher, plus six months of health care. Employees with more than 10 years’ service who aren’t old enough to qualify for the early retirement offer or incentives to leave the company can get $75,000 in cash, the vehicle voucher and six months of health care.

Chrysler spokesperson David Elshoff said employees in Canada will receive "equivalent value" offers.

If not enough workers accept, the company would then lay off staff.

General Motors of Canada Ltd. and Ford Motor Co. of Canada Ltd. have also significantly reduced salaried workforces in recent years.

Cerberus Capital Management, Chrysler’s owner, is currently trying to find merger partners. Reports indicate Cerberus is talking to General Motors and has discussed the idea with Nissan and Renault.

Meanwhile, auto analysts expect the Canadian auto market will soon start sliding, in view of the major plunge south of the border in recent months. Despite U.S. turmoil, the Canadian auto market has improved almost 1.5 per cent this year.

"We question whether the Canadian market’s relative buoyancy will survive this fall," DesRosiers Automotive Consultants said in a note to clients earlier this month.

The decline in the U.S. market has cut vehicle and parts output here significantly. Canada exports more than 80 per cent of new vehicles and 60 per cent of parts to the U.S.

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Speculation continued to swirl Monday that a deal for General Motors Corp. to buy Chrysler LLC from New York private equity firm Cerberus Capital Management LP could come soon.

Both sides have been talking for months, but the pace recently has increased. A person familiar with the negotiations told The Associated Press Friday that officials were trying to work out a deal by the end of the month.

Cerberus wants out of the auto business. And as the credit markets have dried up, GM (GM, Fortune 500), worried about running too low on cash before the U.S. auto market rebounds, wants Chrysler’s currency stockpile.

The person said that the talks have advanced to the point where top executives of both companies have looked at a deal and asked for refinements. The person spoke on condition of anonymity because the talks are secret.

In August, Chrysler said it had accumulated $11.7 billion in cash and marketable securities as of June 30. That figure remains around $11 billion, the person said, despite the Auburn Hills, Mich.-based automaker’s U.S. sales being down 25% in the year through September, the largest decline of any major automaker.

Detroit-based GM is burning up more than $1 billion per month, with several analysts predicting it will reach its minimum operating cash level of $14 billion sometime next year. GM’s sales are down 18%, and the company has lost $57.5 billion in the past 18 months, although much of that comes from noncash tax accounting changes.

Chrysler’s money pile would help solve GM’s cash problem if credit remains unavailable 24 hour payday advances.

Both automakers have had to deny bankruptcy rumors in recent weeks, saying consumers won’t buy cars from a company that looks like it could go out of business.

According to the person familiar with the negotiations, the deal being discussed calls for Cerberus to hand over Chrysler in exchange for GM’s 49% stake in GMAC Financial Services. GM sold a 51% stake in its finance arm to Cerberus in 2006.

Cerberus also would get an equity stake in GM, hoping to get a good return should GM recover when U.S. auto sales bounce back from a serious slump.

Other automakers, including the allied companies of Renault SA (RNO) and Nissan Motor Co. (NSANY), also are in discussions about Chrysler, the person said. Simultaneously, Cerberus, which bought 80.1% of Chrysler from Daimler AG (DAI) in a $7.4 billion deal last year, is negotiating to acquire Daimler’s 19.9% stake.

GM and Cerberus are still a long way from a deal, according to the person, and GM’s board reportedly is cool to the idea.

All that GM, Chrysler and Cerberus have said about the negotiations is that automakers meet all the time. Chrysler Chief Executive Bob Nardelli said Thursday the auto sales drop has created an environment that favors consolidation. 

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It took two tumultuous weeks of moral and fiscal debate, but Congress and the Bush administration on Friday finally put a capstone on the $700 billion bailout of the financial system.

President Bush signed the bill less than two hours after the plan, which had been amended and passed by the Senate on Wednesday, was approved by the House.

The changes the Senate made include the addition of a host of tax break extensions and some new provisions intended to help individuals and businesses.

Here’s a breakdown of some of the economic rescue plan’s main provisions:

Attacking credit crisis: The core of the plan the House voted on is the same as what it rejected on Monday: the Treasury’s proposal to let financial institutions sell to the government their troubled assets, mostly mortgage-related. It will allow the Treasury access to the $700 billion in stages, with $250 billion being made available immediately.

Protecting taxpayers: The final law is also similar to the original House bill in that it includes a number of provisions that supporters say will protect taxpayers. One will direct the president to propose a bill requiring the financial industry to reimburse taxpayers for any net losses from the program after five years. And the Treasury will be allowed to take ownership stakes in participating companies.

In addition, over time, supporters say, taxpayers are likely to make back much if not all of the money the Treasury uses because it will be investing in assets with underlying value.

The law includes a stipulation that the Treasury set up an insurance program - to be funded with risk-based premiums paid by the industry - to guarantee companies’ troubled assets, including mortgage-backed securities, purchased before March 14, 2008.

Curbing executive pay: The law will place curbs on executive pay for companies selling assets or buying insurance from Uncle Sam. For example, any bonus or incentive paid to a senior executive officer for targets met will have to be repaid if it’s later proven that earnings or profit statements were inaccurate.

Oversight: The rescue plan will set up two oversight committees.

A Financial Stability Board will include the Federal Reserve chairman, the Securities and Exchange Commission chairman, the Federal Home Finance Agency director, the Housing and Urban Development secretary and the Treasury secretary.

A congressional oversight panel, to which the Financial Stability Board will report, will have five members appointed by House and Senate leadership from both parties.

Tax breaks: The Senate-version of the bill that the House passed on Friday included three key tax elements designed to attract House Republican votes.

It extends a number of renewable energy tax breaks for individuals and businesses, including a deduction for the purchase of solar panels.

The law also continues a host of other expiring tax breaks (cash loans). Among them: the research and development credit for businesses and the credit that allows individuals to deduct state and local sales taxes on their federal returns.

In addition, the law includes relief for another year from the Alternative Minimum Tax, without which millions of Americans would have to pay the so-called "income tax for the wealthy."

New accounting rules: The bailout plan underlines the Securities and Exchange Commission’s power to change accounting rules on how banks and Wall Street firms value securities, and directs the agency to study the issue.

Some observers argue that tight accounting rules are a major reason for the credit crisis in the first place. Others contend that changing the so-called mark-to-market rules will just bury problems lurking beneath the surface and could further shake investor confidence in the already battered financial sector. (More about the rules.)

Shielding bank deposits: The law temporarily raises the FDIC insurance cap to $250,000 from $100,000. It allows the FDIC to borrow from the Treasury to cover any losses that might occur as a result of the higher insurance limit.

Federal bank regulators, who first floated the idea to Congress late Tuesday, said that bumping up the insurance limits will help improve liquidity at banks across the country. It may also provide a much-needed dose of confidence for consumers who may be worried about the health of their bank. (More about FDIC rules.)

The plan will also temporarily increase the level of federal insurance for credit union savings to $250,000.

Mitigating foreclosures: The new law calls on federal agencies to encourage loan servicers to modify mortgages by a number of means - including reducing the principal or interest rate. It also extends a temporary provision that exempts from federal income tax any debt forgiven by a bank to a borrower in a foreclosure.

Cost: The law’s tax provisions - the bulk of which come from the addition of tax breaks from other legislation - may reduce federal tax revenue by $110 billion over 10 years, according to estimates from the Joint Committee on Taxation. More than half of that is due to the one-year extension of AMT relief.

The Congressional Budget Office said it cannot estimate the net budget effects of the troubled asset program because of the many unknowns about that piece of the bill. However, the agency noted in a letter to lawmakers on Wednesday, it expects the program "would entail some net budget cost" but that it would be "substantially smaller than $700 billion."

Overall, the CBO said, "the bill as a whole would increase the budget deficit over the next decade." 

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Oil prices tumbled more than $6 a barrel Monday, briefly slipping below the $100 level as traders bet that global demand for petroleum products will keep falling despite a planned $700 billion U.S. financial bailout.

A stronger dollar also weighed on crude prices as investors who bought oil and other commodities as a hedge against inflation sold their contracts.

Light, sweet crude for November delivery fell as low as $99.80 a barrel in morning trading on the New York Mercantile Exchange, before edging up slightly to $100.28, down $6.61.

The contract fell Friday $1.13 to settle at $106.89. Crude has now fallen 31% since surging to an all-time record of $147.27 on July 11.

Monday’s sell-off was tied to anxiety over the pending U.S. rescue plan. Following a week of intense negotiations, lawmakers could hold a final vote on the emergency measure Wednesday.

But investors are doubtful whether the plan will be enough to unfreeze global credit markets and restore calm to the financial system.

Global credit markets remain extremely tight, crippling companies’ ability to raise capital and cover basic costs like payroll. If the economy weakens further, consumers and businesses around the globe would likely cut back on energy use even more, analysts say.

"The market is clearly questioning whether the bailout will be enough to prevent a stronger economic downturn. That obviously has potentially negative implications for oil demand growth," said Michael Wittner, global head of oil research at Societe Generale in London.

In another sign of declining U.S. demand for fuel, pump prices kept falling Monday. A gallon of regular slipped about a penny overnight to a new national average of $3.643, according to auto club AAA, the Oil Price Information Service and Wright Express.

The rescue plan would give the administration broad power to use hundreds of billions of taxpayer dollars to purchase devalued mortgage-related assets held by cash-starved financial firms.

Congress insisted on a stronger hand in controlling the money than the White House had wanted no fax payday loan. The government would take over huge amounts of devalued assets from beleaguered financial companies in hopes of unlocking frozen credit.

Oil prices were also pushed down by a stronger dollar. Investors often buy crude futures as a hedge against a weakening dollar and inflation, and sell when the dollar strengthens.

While dollar gained as details of the bailout package become known, analysts said the euro was weaker also because of growing economic problems in Europe.

"It is also a question of the euro losing ground due to a continued deterioration in the euro zone," said Olivier Jakob of Petromatrix in Switzerland. "With the rate of bank failures increasing in Europe and the economy slowing more rapidly than expected, pressure will continue to mount on the [European Central Bank] to lower [interest] rates."

Foreign exchange rates

The 15-nation euro fell Monday to $1.4437 from $1.4614 on Friday.

In other Nymex trading, heating oil futures fell 14.51 cents to $2.8732 a gallon, while gasoline futures dropped 15.57 to $2.5094 a gallon. Natural gas futures lost 40.7 cents to $7.221 per 1,000 cubic feet.

In London, November Brent crude fell $5.73 to $97.81 a barrel on the ICE Futures exchange. 

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How much is good advice worth? At least one St. Louis company paid a director more than $1 million, most of it in stock that has since declined in value.

Other directors collected hundreds of thousands by serving on multiple boards.

For fiscal 2007, David M. Meyer, who serves as non-executive chairman of CPI Corp., got compensation worth $1.4 million from the company, which operates Sears Portrait Studios and other photography businesses. At CPI, he outearned many directors who serve on two or more boards. Meyer also drew $143,679 in pay as a director of Ashworth Inc., a California clothing maker.

Meyer is a co-founder of Knightspoint Partners LLC, a New York-based investment company that led a shareholder ouster of CPI directors in 2004. He served as the company’s interim chief executive until 2005.

Meyer’s pay includes $16,500 in cash and $7,810 in miscellaneous pay in addition to 28,253 shares of restricted stock valued at $1.4 million in the proxy statement. Meyer got a little over half of the shares for his help with an acquisition last year and the rest for unspecified services he provided to the company in 2006.

Meyer’s case illustrates one of the problems with the way companies are reporting pay for directors. They’re required to report the accounting expense of the compensation, not what directors actually received.

Until the restrictions on the shares expire, they’re carried on the company’s ledgers. When the value of the stock declines, its value on the books must be written down.

The stock Meyer received was valued at an average of $48.56 a share in the proxy, but CPI’s stock has fallen recently in value, hitting a low of $12.39 Aug. 21 and trading recently for less than $13 a share.

If the company marks the value of the shares down, it could mean that CPI will report Meyer’s pay as a negative number next year.

That’s exactly what happened at Brown Group.

The company, which had the highest paid director a year ago, this year reported that most of its directors lost money on their service to the company. Big gains in stock values that had been reported on last year’s proxy were reversed when the value of Brown Shoe stock fell from a high of $37.39 in February 2007 to $11.91 on Jan. 8.

Directors who deferred their pay saw the biggest declines. Brown defers pay into "stock units," which correspond in value to the company’s common stock. They’re paid out in cash when a director leaves the board.

Patricia McGinnis, who deferred all of her cash pay, was the area’s highest-earning director for 2006 at $754,358. Brown reported her 2007 pay as a negative $639,858. The company valued her stock-based pay at $699,858 for 2006 but as a negative $699,858 for 2007.

Brown Shoe said McGinnis’ negative stock award reflects a paper loss on deferred compensation from earlier years through 2006. For 2006, the number was positive, reflecting a gain in value through the end of 2006. For 2007, the company marked the value down because of the lower stock price, but it could not reduce the award by more than the amount it increased in 2006 fiscal year. Brown declined to provide further details.

According to Brown’s proxy, the figure the company reported doesn’t reflect the market value of the underlying stock or what McGinnis would receive if she left the board. That would depend on the number of stock units she had accumulated and the stock prices when she leaves.

Peter Lupo, managing director of Pearl Meyer & Partners, a New York-based compensation consulting firm, agrees that the way directors’ stock-based pay is reported can be confusing. If a company provides information about the amount of stock given and its vesting schedule, you can calculate the "consulting value" of the stock. However, assigning a value could be arbitrary if the company doesn’t tell you when the director got it.

This year’s second-highest paid director was Patrick T. Stokes, the former chief executive of Anheuser-Busch Cos. Stokes serves on the boards at A-B, Ameren Corp. and U.S. Bancorp. Altogether, Stokes took in $1.3 million, including $1.07 million from the two companies based here.

Stokes’ biggest paycheck, $927,018, came from his former employer, where he has a post-retirement consulting gig that paid $750,000 last year. A-B provides Stokes with an office and administrative help as well as transportation when he is providing the consulting service. It spent $390,000 on the office and other expenses for Stokes’ consulting arrangement last year.

Stokes’ consulting was due to end next August, but it will come to an early end as a result of Belgian giant InBev’s agreement to buy A-B pay day loans. The deal is expected to close later this year.

August A. Busch III, also a former A-B chief executive, took home more than $1.1 million in pay for serving as a director of A-B and Emerson here and at AT&T of San Antonio.

Busch III’s $579,649 in pay from the brewery includes $392,168 for personal security and $16,992 in consulting fees. According to company documents, the company provides security at Busch’s home "in recognition of Mr. Busch III’s continued prominence resulting from his years of service to the company."

A-B also provides Busch with an office, administrative help and transportation when he consults for the company. It also pays some bills related to aircraft owned by Busch or companies in which he has an interest. Busch’s consulting and other post-retirement arrangements cost the brewer $635,000 over and above his director pay.

A-B paid another $407,611 to Ginnaire Rental Inc., a company that Busch owns, to lease aircraft for business use.

William P. Stiritz was the next-highest paid director at $818,233, including $610,622 from three St. Louis area companies. Stiritz, the former chief executive of Ralston-Purina Co., once served on more than 10 boards.

Stiritz, 74, has cut his board commitments in half. He now serves at Ralcorp Holdings Inc., Energizer Holdings Inc., Reliance Bancshares Inc., Macy’s and Vail Resorts Inc. Ralcorp and Energizer both were spun off from Ralston under Stiritz’s guidance. Ralcorp owns about 19 percent of Vail Resorts.

Public companies here spent amounts ranging from $93,500 to nearly $4 million on director pay last year.

Anheuser-Busch topped the list, spending $3.96 million on 15 directors, followed by Express Scripts Inc., which spent $2.66 million for 11 directors. Twenty-one boards spent more than $1 million.

Companies pay directors in cash, stock awards, stock options and miscellaneous pay, which can include travel for spouses, consulting fees and things like insurance or home security.

About 46 percent of the $46.6 million St. Louis companies paid directors here last year was cash — a combination of retainers, fees for attending meetings and extra pay for serving as committee chairmen. The pay total is for 339 outside directors occupying 363 board positions; some directors serve on multiple boards.

Another $16 million or 33 percent of pay was stock, and $7.5 million or 16 percent was in stock options. The amounts listed in these categories represented the company’s cost for the stock-based pay, not necessarily what directors will realize if they sell the stock or exercise the options.

Because this is the first year all St. Louis-based companies were required to disclose director pay, it’s almost impossible to determine whether director pay is increasing overall. Eleven companies increased the retainers they pay to directors. RehabCare Group and First Banks Inc., which were among a handful not paying director salaries in prior years, added them this year.

Some companies require directors to take all of their pay in stock or units that rise and fall in value along with the company’s stock. Others encourage it by giving directors a bonus for selecting stock rather than cash pay. Still others divide directors’ pay between stock and cash.

Corporate governance experts say that requiring directors to hold stock aligns their interests with those of other shareholders.

Arch Coal, for example, requires directors to defer $40,000 of their $120,000 retainer into a hypothetical investment in Arch stock, which is paid in cash when a director leaves the board.

Belden Inc. pays a $60,000 cash retainer and also gives directors restricted stock worth $115,000. Similarly, Charter Communications Inc. pays directors $40,000 in cash and gives them restricted stock worth $65,000.

At Emerson, $100,000 of each director’s $150,000 retainer is paid in restricted stock.

Express Scripts gives directors $115,000 in stock at the first meeting and a $200,000 grant every year in addition to a $30,000 cash retainer.

Bill Coleman, chief compensation officer for Salary.com, says he thinks it’s good for directors to hold stock because it aligns their interests with shareholders. However, he thinks directors’ pay should be kept pretty simple, with few benefits, because they should be paid for their knowledge and what they can contribute to the company.

jerristroud@post-dispatch.com | 314-340-8384

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HONG KONG — Nomura Holdings Inc., Japan’s largest brokerage, said Monday that it has agreed to buy the Asian operations of bankrupt U.S. investment bank Lehman Brothers Holdings Inc. The deal includes Lehman’s businesses in Japan and Australia.

Nomura called the deal "a once-in-a-generation opportunity" for the Japanese brokerage house. The deal includes Leh-

man’s 3,000 employees in Asia, including its biggest regional offices in Japan and Hong Kong.

"It will significantly extend our reach in Asia. We see immediate strategic benefits, delivering the scale and scope to realize our vision to be a world-class investment bank," Kenichi Watanabe, Nomura’s chief executive, said in a statement.

The deal was valued at around $225 million, one person familiar with the matter told The Associated Press payday advance. Nomura did not give the value of the acquisition.

Meanwhile, Nomura also was close to clinching a deal for Lehman’s Europe businesses, another person familiar with the matter said. Nomura’s statement made no mention of the European operations.

THE ASSOCIATED PRESS

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Group of Seven nations welcomed the $700 billion U.S. markets bailout plan on Monday and said they were prepared to step up international cooperation to protect the world’s financial and banking system.

But a day after Treasury Secretary Henry Paulson said he was “aggressively” encouraging other countries to put in place bailout packages of their own, there was little sign other G7 governments were prepared to follow Washington’s lead.

“We pledge to enhance international cooperation to address the ongoing challenges in the global economy and world markets and maintain heightened close cooperation between finance ministries, central banks and regulators,” the G7 ministers said in a statement following a conference call on Monday lasting 15-20 minutes.

“We are ready to take whatever actions may be necessary, individually and collectively, to ensure the stability of the international financial system,” they said.

The statement, a few weeks before G7 finance ministers and central bank governors meet in Washington on October 10, follows a tumultuous week that started with the demise of Lehman Brothers and ended with one of the biggest financial rescues in history.

The conference call at 7:30 a.m paydayloans. EDT, which was convened on Sunday, followed intense telephoning between senior officials over recent days and a preparatory call by deputies to the ministers and central bank governors, a G7 source told Reuters.

The statement said ministers welcomed the “extraordinary actions” taken by Washington to remove illiquid assets that have contaminated banks’ balance sheets and fuelled a financial crisis widely seen as the worst since the 1930s.

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