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No Salary, Just Stock for Akradi in 2008

Chanhassen, Mn — Bahram Akradi, CEO of Life Time Fitness, Chanhassen, MN, will forgo his $926,667 cash salary and his cash incentive compensation this year, instead receiving his 2008 compensation in the form of 188,960 shares of restricted stock. The company's stock closed at $31.65 on March 26.

The value of Life Time's stock has fallen by 51 percent in the past five months, reaching a low of $25.64 at one point. The move is Akradi's effort to demonstrate his confidence in the value of the company, according to a release from Life Time.

The company's fourth quarter 2007 and year 2007 financials showed that the company is growing its net income by more than 20 percent. Membership growth also continued but at a slower pace.

Some analysts saw the slower membership growth as a sign that the company was not immune to the pressures of the economic slowdown. However, Akradi has stated in several financial calls that mature Life Time clubs are often at their capacity, which he puts at 11,000 memberships. Therefore, he has begun to raise initiation fees and monthly dues at some clubs to decrease membership numbers and overcrowding.

Akradi said in a call with analysts in February that the company's 2008 revenue is likely to be between $780 million and $800 million, which was below Wall Street analysts' expectations of $806.8 million. That was a cause for concern for some analysts. However, despite the slowing economy and membership growth at Life Time, most analysts are keeping their “buy” rating on the company's stock since the higher-income clientele that the company caters to may be less affected by an economic downturn.

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