Eckert joins El Segundo, Calif.-based Mattel after announcing his resignation as president and chief executive of Philip Morris Co.'s Kraft Foods Inc. unit on Tuesday evening.

Mattel shares were up 9/16 at 11-7/8 in early morning trade Wednesday on the New York Stock Exchange.

The company, which also makes Hot Wheels and Matchbox cars, has struggled through a recent succession of quarterly earnings disappointments stemming largely from its acquisition last year of software developer The Learning Co.

Mattel has been trying to sell the unit, but a buyer has not yet emerged. It is expected that the ailing unit will fetch far less than its $3.5 billion purchase price.

Last November, the founder of Learning Co., Kevin O'Leary and Michael Perik, left Mattel after the educational software division reported much-larger-than-expected losses for the third quarter in 1999.

The toymaker's problems climaxed in early February, when Barad announced her resignation, after another disappointing earnings quarter.

During her time at Mattel, Barad was chiefly responsible for Barbie production and sales. Barad, who spearheaded a campaign to revive Barbie sales, had taken charge of the doll in 1983 and was instrumental in creating new characters, wardrobes and accessories -- reversing the decline in the popularity of the doll, which was launched in 1959.

Barad's resignation was preceded by departure of the company's chief financial officer, Harry Pearce, who announced his retirement in January.

President Ned Mansour's departure in April was the latest in the string of executive resignations at the troubled toymaker.

Aside from financial woes, Mattel has also been plagued by a lawsuit, filed by competitor Hasbro Inc., the maker of Tonka Trucks and Monopoly board games, for damages allegedly infringing upon patents it holds for a toy remote control vehicle.

On April 12, Hasbro said its was issued two patents for its toy between March 1998 and July 1999, and a third has been allowed and will be issued later this year. It said the product, called Ricochet, was on the market from 1994 until 1996.

The company alleged that, since March 1998, Mattel has been selling two products, known as the Rebound and the Super Rebound, that infringe upon its patents.

In related Mattel news, A $50 million good-bye kiss for Barad is being labeled excessive in view of the poor performance of the toy company's stock during her three years at the helm, New York State Comptroller Carl McCall has said in a letter urging board members to reconsider the severance package.

In the letter to Mattel's acting chairman William Rollnick dated May 8, McCall noted the state's Common Retirement Fund, for which he is sole trustee, holds more than 1.2 million Mattel shares.

``During the three years that Ms. Barad served as CEO of Mattel, the total return of Mattel shares was a negative 55.8 percent as the company's stock price fell from 27 3/4 a share to 11 13/16,'' McCall said. He noted that the Standard & Poor's 500 stock index was up 99.2 percent over the same period.

``It is disturbing to hear that the board has elected to reward the person who presided over this precipitous decline,'' he said.

In a telephone interview, the comptroller added, ``we're trying to make a point that this company and others have to move away from this trend of compensating people for poor performance.''

He said he has not been in contact with other big investors about the Mattel situation. Asked whether the state is planning legal action, he said his legal staff is looking into the matter but has not yet reported back to him.

In the letter, McCall criticized ``additional and accelerated benefits'' that were offered to Barad upon her departure on top of a generous severance provision that was negotiated at the time she became CEO in January, 1997. Barad resigned on Feb. 3 of this year.

``I am particularly disturbed that the board decided to forgive a $3 million loan granted for the purchase of a home and to provide payments on a $5 million life insurance policy,'' McCall wrote. He added that he was ``outraged'' by an agreement for the company to continue to pay for outplacement services, memberships and financial counseling services.

The comptroller said that the company's announcement that it was taking an after-tax charge of $38.4 million, equal to 9 cents per share, for severance payments added insult to injury.

The state retirement fund invests for 880,000 retirees and active workers and has about $127 billion in assets.

Asked if there were any plans for the board to take up the matter, a spokesman for Mattel declined comment.

Source: Reuters

[Posted 5/17/2000]