A well-heeled exit
When Steven Madden Ltd. (SHOO) first announced the exit of CEO Jamieson Karson in March, I didn’t think much of the boilerplate in the 8-K stating that
Mr. Karson’s resignation was not the result of any disagreement with the Company’s operations, policies or practices. For the purposes of determining any payments to which Mr. Karson will be entitled following his resignation, the Company and Mr. Karson have agreed to treat his resignation as a termination without Cause.
Seems pretty standard, right? Cut to today’s proxy filing. In a wall of text underneath the caption “EMPLOYMENT ARRANGEMENTS”, the proxy notes that
Effective March 24, 2008, Mr. Karson resigned from his position as Chief Executive Officer, director and Chairman of the Board of Directors of the Company, and entered into a Mutual Release with the Company (the “Mutual Release”). Pursuant to the Mutual Release, the Company shall consider Mr. Karson’s resignation to be a termination without “cause” (as defined under Mr. Karson’s amended and restated employment agreement), and shall (1) pay Mr. Karson, on April 1, 2008, the sum of $4,000,000…
To be fair, Karson did step up to the plate in May 2001 after Steve Madden’s major securities fraud bust. However, given the Company’s checkered past and miserable stock performance, SHOO could have at least acknowledged that it was paying Karson $4 million in severance in the original 8-K. Maybe their SEC disclosures are as knockoff as the shoes.
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Posted in Tags: executive exits, proxy |
 2 Comments » |
April 30th, 2008 at 3:18 pm
So you are exactly correct in identifying that the original 8-K was materially inadequate in not specifically identifying the amount of the payments that would be owed by the company to Karson. When you read through the Employment Agreement detail on how the termination compensation was to be calculated, it was immediately obvious that the amount owed would be $4,000,000. This being the lesser of the two options provided for in the agreement. I thought it was a nice touch that they also agreed to keep paying the lease on his car through the duration of the lease agreement. I mean one wouldn’t seriously expect Karson to dip into his $4.0mm haul to pay for a fresh set of wheels. Why not ask the shareholders to cough up a few more bucks? It’s only other peoples money…..
May 2nd, 2008 at 9:13 am
It does not surprise me, there are many “heels” , I mean executives running off with millions as the sahreholders are left holding the bag !
Scared George