The Most Outrageous Acts of Corporate America: November’s Highlights (and Lowlights)
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Every day Michelle Leder and her crew at Footnoted.com comb through Securities and Exchange Commission filings in search of telling nuggets about deals, transactions, and executive compensation. Every month, she stops by our studios to share some of the highlights. November's crop included a familiar mix of private jets, large retirement packages, and, in one instance, a strange resolution of a dispute over $12.1 million in antique maps.
Bob Pittman, Yet Again. Bob Pittman is a longtime media high-flyer: a founder of MTV, a top executive at Time Warner and now CEO of radio giant Clear Channel's broadcasting and advertising business. Pittman's high-flying also translates to his choice of aviation. In October, Footnoted.com reported that Pittman's deal stipulated that he would have a plan available to him — preferably a Dassault-Breguet Mystere Falcon 900 — for business and personal use. In November, Clear Channel filed a new disclosure, noting that the company would pay a leasing company owned by Pittman $3 million per year for the use of the jet that will ferry Pittman around the country. The name of the leasing company? Yet Again.
Not Hot in Cleveland. When Wendy's sold its Arby's unit, it decided to do a little corporate reshuffling. Specifically, it decided it no longer needed the Atlanta base where Arby's had been headquartered, and decided that top executives should work out of the Wendy's offices in Dublin, Ohio, which is northwest of the state capitol Columbus. Not all executives were eager to swap Hotlanta for a colder, and less-happening town, among them CEO Roland Smith. As an army veteran and veteran corporate executive, Smith had moved plenty of times in his career. And he essentially decided that he's rather relinquish the post of CEO of a large public company than move to Ohio. Smith invoked a clause in his employment agreement that the company wouldn't move him from the Atlanta area without his consent. That move triggered $12.57 million in compensation. Note: this perk is not widely available for executives who prefer not to move to Ohio.
ADP's Payroll Shrinks. On November 9, payroll processing giant made what seemed to be a routine executive announcement: CEO Gary Butler, a 37-year veteran of the company, was stepping down as CEO and was to be replaced by President Carlos Rodriguez. The company said this was simply the execution of a previously established succession-planning plan. Among the retirement perks: $30 million in deferred compensation and options, $1.55 million in severance, and office and secretarial support for another seven years. But, responding to a reader tip, Footnoted.com unearthed a factor that ADP didn't discuss that may have contributed to Butler's career move. On November 6, three days before the retirement announcement, Butler had been arrested in South Carolina on a charge of domestic violence after an incident with his wife.
Take Two Mill and Call me in the Morning. Mergers and acquisitions can be stressful times for top executives. They have to work hard to get the deal done, and then face the prospect that the merged company may not have use for their services. Medco, the giant prescription management company that is hoping be acquired by ExpressScripts in a $26 billion deal, has tried to assuage such fears by making some extravagant promises to top executives. If he is terminated within a year after the merger closes, Medco Chairman and CEO David B. Snow, Jr., will receive $38.96 million, including $12.6 million in cash severance. Other C-Suite execs received lesser promises: $15.7 million for President and Chief Operating Officer Kenneth O. Klepper, and $10.33 milion for Chief Financial Officer Richard J. Rubino.
Daniel Gross is economics editor at Yahoo! Finance
Follow him on Twitter @grossdm; email him at grossdaniel11@yahoo.com
