Gap to shrink board, cut director pay

ATLANTA (Reuters) - Retailer Gap Inc (GPS.N) said on Wednesday March 18 that it will reduce the size of its board to 10 from 13 and cut directors' pay as it focuses on cost management.

The apparel retailer added that Chairman and Chief Executive Glenn Murphy volunteered to cut his annual salary by 15 percent. Merit-based salary increases were eliminated for most headquarters workers this year, it added.

Gap said directors Howard Behar and Penelope Hughes agreed not to stand for re-election at the company's annual meeting this year. Additionally, company co-founder Doris Fisher also decided not to stand for board re-election, and will assume the role of honorary lifetime director.

The 2009 pay for remaining board members is being cut by reducing both the annual cash retainer and stock compensation by 15 percent, Gap said in its statement.

San Francisco-based Gap is looking to turn around its business as it tries to improve products, stores and merchandising to recapture customers who have turned to rival brands.

The company said it reduced operating expenses by $478 million in the fiscal 2008 year.

(Reporting by Karen Jacobs; Editing by Tim Dobbyn)