updated 5/16/2005 3:41:50 PM ET 2005-05-16T19:41:50

One day before shareholders ousted three directors of Blockbuster Inc. partly over executive compensation, the movie-rental chain’s board approved raises of 5 percent to 18 percent for six top managers.

Blockbuster Inc. revealed the raises Monday — five days after the board shakeup — in a filing with the Securities and Exchange Commission.

Blockbuster spokeswoman Karen Raskopf said the executive pay increases had been under consideration for several months and were in line with those given to other company employees. She said the executives helped complete Blockbuster’s spinoff from former owner Viacom Inc. and its launch of a new online rental service to compete with Netflix Inc.

“We are a company that is transforming itself, and that effort needs to be rewarded,” Raskopf said. “Continuity of management is important to the company.”

Chief Financial Officer Larry J. Zine will be paid $640,000 in 2005, up 7.6 percent from $594,808 last year; Nicolas P. Shepherd, president of U.S. store operations, will get $565,000, up 18.3 percent from $477,404; General Counsel Edward B. Stead will receive a 7.6 percent boost, to $560,000 from $520,673, the company said.

Three executive vice presidents also got raises. Chris Wyatt will receive $649,543, up 10.4 percent from $588,216; Frank G. Paci will get $434,000, a 5.8 percent raise from $410,000; and Eileen M. Terry will get $342,000, up 5.2 percent from $325,000.

The company did not mention bonuses or stock awards for the executives. Last year, Zine was given $7.5 million worth of stock, Stead got $5.5 million in stock, Shepherd got $3.5 million in stock, and Wyatt got $3.2 million in stock.

Raskopf said the executives would be eligible for bonuses if the company meets certain financial and performance targets, which Blockbuster refused to disclose. The company lost $1.25 billion last year.

Chairman and Chief Executive John F. Antioco was not among those given a raise last week. In 2004, Antioco got salary and bonuses worth $7 million in cash, $26.8 million in stock, and options for another 5 million shares, a package worth more than $50 million if the shares gain 5 percent a year.

Billionaire financier Carl Icahn criticized Antioco’s pay package during his successful campaign to win three seats on the Blockbuster board, including Antioco’s. Icahn, however, supported adding a board seat for Antioco and reappointing him chairman.

Antioco has a severance package that the company valued at $54 million. Icahn said last week he wanted to keep Antioco as CEO rather than pay him severance.

Icahn did not immediately return a call for comment on the latest raises.

Blockbuster shares fell 6 cents to $10.09 in afternoon trading Monday on the New York Stock Exchange, where they have traded in a 52-week range of $6.50 to $16.15.

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