August Busch IV, the last member of the Busch dynasty to run Anheuser-Busch, took the witness stand Tuesday to defend the company from allegations of sex discrimination brought by a former top-ranking female executive.
His much-anticipated testimony in the high-profile case brought by Francine Katz against A-B mirrored remarks made last week by his father, August Busch III.
Katz, former vice president of corporate communications, alleges she was paid far less than male colleagues based on her gender, and she’s seeking millions in compensation.
“I think she was paid very fairly,†Busch IV testified to a packed courtroom. The younger Busch, 49, has tried to remain out of the public spotlight since relinquishing his role at the brewer in 2008, after the sale of the brewery to Belgium-based InBev.
Like his father, Busch showed up at ºüÀêÊÓƵ Circuit Court wearing cowboy boots with his business suit. And like his father, he greeted the seven women and five men on the jury as he took the stand.
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“Hello, ladies and gentlemen, I’m August,†Busch IV said. “Nice to meet you all.â€
Katz joined A-B in 1988, and in 2002 she was promoted to vice president of corporate communications, replacing John Jacob. At the time of her promotion, Katz also became the first female member of A-B’s strategy committee.
In her lawsuit, Katz alleges her base pay after her promotion was $300,000, while Jacob’s base salary was $605,000 in 2001, his last full year as chief communications officer.
Katz alleges she another former A-B executive, Marlene Coulis, were the lowest-paid among the company’s 15 to 20 strategy committee members. Katz maintains she missed out on $9.4 million in compensation after she was promoted.
Referring to Katz’s work to curb restrictions on alcohol advertising that some groups were pressing for, Busch IV, who was CEO from December 2006 to November 2008, said Katz was effective. “She did a very good job,†he said.
But the promotion didn’t come with the pay and all the other trappings that Katz expected. She testified last week that it took several years for her to get an office with a conference room, as other strategy committee members had. She also testified that she asked her superiors repeatedly from 2002 to 2007 for her pay to be re-evaluated. By 2008, the year she left, her base pay was $345,280.
Katz sent Busch IV an email in October 2006 asking him to consider giving her the title of “chief communications officer,†a title formerly held by Jacob, according to documents submitted into evidence by Katz’s attorneys.
Busch IV said Tuesday that he didn’t think the title was appropriate for Katz.
“The title of chief communications officer, to me, was confusing because it could mean she was doing the duties of the chief executive officer or the chief financial officer,†Busch IV said.
Echoing his father’s testimony, Busch IV said Jacob, who served as a confidential adviser to Busch III, and Katz had substantially different job duties. Jacob, a former president of the National Urban League, was an A-B board member before he was hired by the brewer in 1994. “Both individually did an excellent job, but they had different roles,†Busch IV said.
Pat Stokes, who was CEO from 2002 to 2006, testified earlier Tuesday that Katz’s salary was based on the market rate for public relations executives at comparable companies, and said it was 30 percent higher than the market median.
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When Katz sent Busch IV an email in 2007 asking for her pay to be re-evaluated, instead of ignoring the request, as Katz has alleged, Busch IV said he spoke to her boss at the time, David Peacock, about her pay. Peacock was vice president of marketing until November 2008, when he was named president.
“I took it very seriously,†Busch IV said about Katz’s request. More responsibilities were added to Katz’s workload at the end of 2007, including A-B’s ethnic and community relations, to justify a change in her pay, Busch IV said.
But changes to compensation took time, he said, and by 2008, “unfortunately, we were sold that year.†Katz’s market rate, which set the basis for her pay, did not change, he said.
“We were being highly scrutinized (on executive compensation) and had to be objective and go through a methodological process,†Busch IV said.
Katz’s attorney, Donna Harper, asked Busch IV if he knew that Katz was upset that her salary re-evaluation wasn’t happening more quickly. “Not at the time,†he said. “But I do now.â€
Most questions from Harper focused on how pay and bonuses were decided during Busch’s short tenure as CEO. Katz’s attorneys entered company documents into evidence showing that in the time period following Katz’s request, Busch IV directed changes in compensation for several male executives.
During Busch IV’s testimony, he touched on his views about the sale of A-B to InBev in 2008, which he opposed. “I gave everything I could to not make that happen,†he said of the sale.
The company “sat on the sidelines of global consolidation†in the 1990s, when its competitors were getting larger through acquisitions, he said, which “made A-B vulnerable to a takeover.â€
A-B’s board agreed to the $52 billion sale in mid-2008. “The shareholders went for the money,†Busch IV said.
After the company’s sale, Busch IV largely disappeared from public view, but he returned to the spotlight when an accidental drug overdose in December 2010 killed his girlfriend, Adrienne Martin, at his mansion. In 2012, a judge approved a $1.75 million payment by Busch IV to settle a wrongful death lawsuit brought on behalf of Martin’s ex-husband, Dr. Kevin Martin, and other family members.
Busch told the Post-Dispatch in January 2011 that he had battled depression and “other issues†after the company’s sale.
A five-year consulting agreement Busch IV received from A-B InBev following the sale, which paid $120,000 a month, ended in December.
Busch IV arrived at the courthouse Tuesday accompanied by Maurice “Marcy†Graham, a partner with ºüÀêÊÓƵ law firm Gray, Ritter, Graham P.C., who has represented him in his other legal matters.
Katz v. Anheuser-Busch, now in its second week, is expected to conclude next week. Today, other former A-B executives including attorney Anthony Franks, are set to testify.