A new dawn for CEO’s pay at Sunrise …

Sunrise Little Trout Bay 4

Sunrise Senior Living (SRZ) is apparently in something of a hurry to keep its chief executive on board and happy: Yesterday, it disclosed a new employment agreement with him attached to an 8-K filing, a full year before his current deal was due to expire.

Mark Ordan, who has run the nursing-home and assisted-living chain since 2008 and helped found Fresh Fields Markets before that, keeps his base salary of $650,000 a year, and target bonus of $975,000 (with a maximum bonus of of $1.95 million). But the big money is in a $3 million cash signing bonus, plus a new slug of options on 1 million shares at Wednesday’s closing price of $3.94 a share. Those options vest over the next three years.

In return, Sunrise shareholders get Ordan’s promise not to quit without good reason, or without the board’s approval (and not to compete for two years after departure). If he does quit, he has to give back the $3 million bonus — assuming Sunrise can make him, since the bonus is to be paid out within a couple of weeks. After all, possession is nine tenths of the law, as they say, and these kinds of clauses seem to invariably give rise to disputes over whether an executive quit or was pushed out.

If he leaves with the board’s consent, he has to give up most or all of the options, depending when it happens. But if he gets the boot within two years after there’s a deal to sell the company, he gets all the options immediately.

While employed, Ordan also gets

“an executive medical and dental insurance plan providing supplemental first-dollar coverage for the Executive and his eligible dependents for those items not covered under the Company’s general health plan (for example, prescriptions, orthodontia, eye surgery or other coverage which may be excluded from the group medical plan), at the expense of the Company.”

Curiously, though, Sunrise only extended Ordan’s deal for one year. (An automatic extension in the new pact only kicks in at the end of each contract year.)

Sunrise has had a rocky ride of late, as The Wall Street Journal chronicled late last year, and at $4.20 a share or so, its stock price is just a fraction of what it was at its lofty peaks of three years ago. Ordan has made some progress since then, selling some properties, hashing out a deal with some German lenders, resolving an SEC investigation without penalties, and settling a lawsuit with a big customer. There’s still a long way to go if the company ever hopes to return to its glory days.

As an aside, this is a filing that should make punctuation mavens purr with delight: Throughout, Sunrise refers to Ordan’s bounty as “Re-Signing Options” and “the Re-Signing Bonus.” Ah, the difference a couple of tiny hyphens can make!

Image source: *clairity* via Flickr


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