Polycom gives cash and electronics to ex-CEO

July 24, 2013

With earnings season in full swing, we’re paying close attention to companies that use their routine earnings releases to dump other bad news. Take Polycom’s earnings release filed after the market closed yesterday. The company said that CEO Andrew Miller had resigned last Friday “after the Audit Committee of the Board of Directors found certain irregularities in Mr. Miller’s expense submissions.”

While the company said the amounts involved did not have a material impact on the company, falsifying expense reports is often viewed as a gateway drug. If a CEO (or really any employee) does that, who knows what else they may be exaggerating about? Exhibit A, of course, is former HP executive Mark Hurd, who was fired nearly three years ago over something similar.

Polycom’s stock is down sharply today on the news and two law firms have already announced that they’re investigating (see here and here).

Miller isn’t exactly walking away empty-handed, according to the separation agreement attached to the 8-K that was filed yesterday. He’s getting a $500K lump-sum payment, a pro-rated bonus, and three months to exercise any options that are already vested. But the real cherry-on-top comes from the cache of electronics he’s taking with him. As the filing notes, Miller will be able to keep his two Lenovo Thinkpads, an Ipad and his Samsung Galaxy 4 phone. Granted, that’s not the reported $35 million that Hurd reportedly walked away with for a similar offense, but it’s not nothing either.

Needless to say, none of these details were included in the press release that Polycom released yesterday.

We’d also like to point out that we flagged Polycom several times in late 2011 and early 2012 for footnotedPro subscribers. Several changes to their risk factors in the 10-K that they filed in Feb. 2012 particularly caught our eye. At the time, the stock was trading at $22 a share.

 

Posted in: Agreements, D&O Turnover

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