Topeka ? Debt-ridden Westar Energy Inc. issued a report Wednesday that showed former chief executive David Wittig’s compensation package last year totaled nearly $10 million.

The proxy statement to shareholders of the Topeka-based company that was filed with the Securities and Exchange Commission also revealed that:

l Federal investigators are looking into Wittig’s pay package and those of other current and former executives of the beleaguered company.

l Westar will seek reimbursement from some current and former company officials for travel on the company’s jets.

Westar, the state’s largest electric utility, is under investigation by the U.S. Attorney’s Office and SEC, and it is the subject of numerous lawsuits filed by shareholders.

The company has been ordered by state officials to restructure while carrying about $3 billion in debt.

In 2002, the document filed Wednesday showed, Wittig’s salary and benefits package was $9.88 million. Executive vice president and chief strategic officer Douglas Lake’s package was set at $5.5 million. During that year, Westar lost nearly $800 million.

In 2001, Wittig’s salary and benefits were $3.8 million.

“It’s a disconnect between performance and pay,” Jim Zakoura, an attorney who represents industrial customers of Westar, said of the salaries. “In a year that the company had enormous losses, you would think that they would be more concerned.”

¢ Westar sued over retirement accounts (4-27-03)¢ Westar could owe past execs $81 million (4-14-03)

By contrast, Jim Haines, Westar’s current president and chief executive officer, earns a base salary of $750,000 and 250,000 restricted shares of stock.

Westar claims

Westar, however, said much of its previously agreed-to compensation to Wittig and Lake had not been paid and that Westar might no longer be obliged to complete the payments because of company claims against Wittig and Lake.

For 2002, Wittig received only $2.7 million of the total package, said Larry Irick, Westar general counsel and corporate secretary. Lake received $1.6 million. The executives did not receive incentive compensation worth millions of dollars, Irick said.

Wittig received a base salary of $616,633, as well as $125,000 in securities options and $2 million related to the sale of benefits under a life insurance agreement.

The proxy statement listed another $4.2 million in restricted stock and $2.9 million in other compensation, most of which the company said was being contested.

Karla Olsen, a spokeswoman for Westar, said if either Wittig or Lake tried to claim the additional compensation, the company would contest the matter.

Zakoura said Westar was spinning the facts.

Westar may believe it has claims against Wittig, he said, but the proxy statement showed Westar was obliged to pay Wittig $9.88 million for 2002.

Neither Wittig nor Lake could be reached for comment.

The proxy statement further showed the company had potential liabilities to Wittig and Lake of nearly $82 million in severance, life insurance, retirement benefits and other compensation issues.

“We do not concede, however, that any amounts are owed to Mr. Wittig or Mr. Lake, and we believe we may have potential claims and defenses against Mr. Wittig and Mr. Lake,” the company said in its filing.

Investigations continue

Wittig resigned in November as president and chief executive officer after being indicted on federal charges of defrauding a Topeka bank in connection with a $1.5 million loan unrelated to Westar business. He has pleaded innocent to the charges. A trial is scheduled for June.

Lake was placed on unpaid administrative leave in December.

In September, Westar was served with federal subpoenas for information on the use of corporate aircraft and shareholder meetings.

But according to the proxy statement, the probe into Westar dealings has deepened since then.

More subpoenas were issued “requesting further information concerning the use of aircraft, executive compensation arrangements with our former chief executive officer and other former and present officers, a proposed rights offering of stock of a subsidiary and the company in general.”

Since initiation of the federal grand jury probe, Westar appointed an internal committee to investigate company operations. That committee’s report has been completed, according to Westar, and will be given to the company’s board next month.

Jet use

The filing also indicated Westar will probably “seek reimbursement from, or impute income to, various former and current officers and directors … for personal use of aircraft.” The company said it would also consider its legal options “as a result of any conclusions and recommendations of the Special Committee concerning any improper conduct found to have been committed.”

The use of corporate aircraft by Wittig, other executives and board members has caused a storm of controversy in recent months. Among current and former Westar directors are former Kansas University Chancellor Gene Budig and Lawrence businessman Frank Becker.

Records turned over to industrial customers of Westar showed executives during the past few years used the corporate jets extensively. Flight logs showed more than 100 trips to New York, as well as trips to Europe. Zakoura and other consumer advocates noted some of the trips coincided with sports events, such as Kansas University’s trip in 2002 to the Final Four in Atlanta, or appeared to be simply vacations.

Wittig is a KU graduate who excelled on Wall Street and returned home to lead a respected utility company.

During the 1980s, he was a poster boy for Wall Street in the 1980s — literally. He was pictured, cigar in mouth, on the front cover of Fortune magazine in 1986 for an article about young investment bankers. In that story, Wittig said he would leave Wall Street by age 40, and he did.

Under his watch, the company got into investments that critics say have been a drain on the company’s core utility operations. Those investments include the Protection One monitored security business, whose losses have contributed to Westar’s mounting debt.

Shares of Westar stock rose 15 cents Wednesday to close at $14.06 on the New York Stock Exchange. Westar stock has risen more than $4 per share since Wittig resigned Nov. 22 and Haines was named as his replacement.