It’s been a long time since there’s been a Gold Star Friday, but Savvis Communications (SVVS) filed its 10-K while I was away and buried in the exhibits was this agreement between the company and former CEO Rob McCormick. You remember McCormick, right? He was the guy who was christened the “Lap Dunce” by the NY tabs after ringing up a $241K bill at Scores, a high-end strip club in Manhattan.
But unlike a lot of other disgraced CEOs who manage to slip away with buckets of cash, McCormick’s agreement is pretty stripped down. indeed, the only thing that Savvis is really offering McCormick is his pro-rated bonus for 2005, up until he left in late November. In exchange, McCormick is required to “cooperate with Savvis in any litigation or government investigations”, perhaps such as this one by the Manhattan DA, and provide $20K in escrow to cover the disputed American Express bill. He also gets accelerated vesting on his options, though Savvis is only trading at 75 cents a share. Under the agreement, he has until the end of this year to exercise them.
Given how Savvis was dragged through the mud on this, it’s nice to see them not totally caving in on McCormick’s send-off. Still does it really take a $241K strip club bill to make boards start acting responsively?