A few weeks ago, Symantec Corporation’s (SYMC) board decided that enough was enough. After years of disappointing results under different leaders, the board fired then-chief executive Enrique Salem and tapped its Chairman, Stephen M. Bennett, to become the new president and CEO. The board also charged Bennett with the daunting task of turning the company’s performance around.
But knights in shining armor don’t come cheap, it turns out.
Bennett, who previously served as CEO of Intuit (INTU) and – before that – spent a couple of decades rising through the management ranks at General Electric Co. (GE), appears to be well qualified to lead the strategic review that he started last month, as soon as he accepted the job.
The 8-K that Symantec filed yesterday, along with Bennett’s accompanying Executive Employment Agreement, disclose that the company will pay Bennett a base salary of $1 million per year. The target amount set for his bonus in fiscal 2013 is 150% of that, or $1.5 million, except it will be prorated to reflect how long he worked in the job in FY 2013.
Depending on how Symantec performs in fiscal 2013, Bennett is also eligible to receive an award under the Long-Term Incentive Plan with a target value of $750,000.
There is more: Symantec further showered Bennett with a hero’s bouquet of grants. For starters, the board gave him 115,000 restricted stock units that will vest over four years. He got another grant of 115,000 performance-based restricted stock units (PRUs) which primarily vest only if the company meets its financial performance goals. However, there is this clause, which indicates that even if he can’t accomplish the turnaround tout de suite, he will not end up empty-handed:
“In addition, notwithstanding the provisions of the PRU Agreement, Mr. Bennett’s Conditional PRU Award (as defined in the PRU Agreement) shall not be less than 80,000 PRUs regardless of the Company’s actual non-GAAP EPS achievement for fiscal 2013.”
Furthermore, we mustn’t forget about the grant of 450,000 performance contingent stock units (PCSUs). But in order for these stock units to vest, Bennett has to lead the company in the right direction, so that its stock price recovers. Threshold goals are set at $18.00 per share, $20.00 per share, and $22.00 per share, according to the formula set out in the filing. With the current stock price at about $17.72 per share, those goals seem reasonable. But we hasten to point out that the stock price has already increased more than 30% since Bennett took over, so it’s not as if Symantec set a ridiculously easy goal.
And, finally, if Bennett is involuntarily terminated for any reason other than cause, disability, or death, his agreement provides that he will get at least a couple million dollars, together with bonuses, two years’ worth of COBRA premiums, and the accelerated vesting of his equity interests.
It seems that even knights in shining armor have to think about their futures once their dragon slaying days are done.
Image source: Medieval knight in attack position, via Shutterstock
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