A modest agreement at International Rectifier …

August 26, 2010

We don’t hesitate to call companies out for giving former directors and executives lush consulting contracts. Look no further than Northrop Grumman, Acxiom and Boeing, among others.

Now we come across a consulting contract we might even like: One filed with an 8-K on Tuesday by International Rectifier (IRF), a maker of power-management semiconductors in El Segundo, California.

Board member Jack O. Vance is stepping down with the expiration of his term, but the company wants to ensure he’s available “to advise, consult with, and assist the Company on an as-needed basis,” as it puts it in the consulting agreement, effective Aug. 18.

Vance isn’t working for a song, but this is no million-dollar deal with vague duties and an open-ended commitment by the company.

Vance will be paid $2,400 a day, for the days he consults with the company. That’s $300 an hour for an eight-hour day, and he could bring in as much as $800 an hour, since just three hours of work can trigger a full day’s payment. But he’s also agreeing to waive the fee “for time spent up to three days per quarter during the first year” of the deal (a $7,200-a-month value!).

Much of the agreement centers on consulting over legal matters, and, in particular, advice

“related to any current or future actions, lawsuits, or other proceedings that have been or may be filed based on events that occurred while Consultant served as a Director of the Company…”

Vance, who was 84 last September, started on the board in 1988. And sure enough, the company has previously disclosed a variety of lawsuits, including a class-action securities lawsuit settled in California for $90 million (split 50-50 with its insurer). Another suit — a derivative case titled Mayers v. Lidow, filed August 13 last year in Los Angeles Superior Court — revolves around “certain of the Company’s directors and former officers…” Derivative lawsuits, of course, take the stance that the plaintiff is suing a company’s managers or directors on behalf of the company itself, in effect. The company says in its May 3 10-Q that a special committee of directors not named in the suit is investigating with the help of separate counsel.

The company is also suing a former chief executive who now works at Efficient Power Conversion Corp. (also a defendant), “alleging improper and unauthorized use and/or misappropriation of certain Company confidential information, trade secrets and technology related to the [International Rectifier’s] Gallium Nitride development program.” The defendants have filed a countersuit, and the legal wrangling has commenced.

All in all, this could prove to be a pretty busy retirement for Vance.

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