First a word or two about the Super Bowl. To be honest, I am not a huge fan of American Football....I follow cricket and on occasion, some basketball. The only reason I look forward to the Super Bowl is for the ads. The mega hype surrounding these ads is strong enough to compel me to tune in. I am an enthusiastic supporter and participant of online polls that vote for the Best and Worst ads. This year CareerBuilder.com's 'Tips' ad has been voted as the Best and the Worst Ad on WSJ.com. See it for yourself here.
Now lets get down to business.....
This blog has often noted irregular, bloated or ridiculous severance payments to senior executives ....these agreements are getting more and more innovative, not to mention costly for companies and shareholders. Here is another one I found for New York & Company.
Mr. Richard Crystal has consented to extend his employment agreement until Feb 11th, 2011 without a salary increase...the kind man has also given up his severance payment of $3.9 million which he might have received in 2011 if his employment agreement did not get extended at that time. One might think.....there has to be a catch somewhere, right? I mean the man works at the same 'measly' salary of about a million bucks and agrees to waive severance.
But wait....here is the catch. In exchange for 'waiving' his severance, New York & Company's shareholders have to shell out $2 million between now and 2011. It's been termed as a 'signing bonus' for Mr.Richard Crystal. Signing bonus for an existing CEO? In today's hardpressed times? After announcing a cut of 310 jobs in January of this month?
As he put it himself while announcing the job cuts and store closings earlier last month,"These are unprecedented times in the retail industry and across many other industries and geographic regions."
The times may be unprecedented, Mr.Crystal but so is your modified employment agreement.
1 year ago