A rare Monday gold star…

January 9, 2006

On Friday morning, Circuit City (CC) put out this press release announcing “record December sales”. But it waited until after the market closed to file the 10-Q that included this retirement/consulting agreement with outgoing CEO W. Alan McCollough.

Oddly enough, the deal isn’t all that eye-popping as far as compensation goes, particularly in light of when it was filed: late on a Friday. One might have expected Circuit City to trumpet the fact that they weren’t sending McCollough off in the style many CEOs have come to expect: fat consulting and severance packages, continued benefits, a country club membership, office space and whatever else they can throw in. Indeed, based on the agreement, McCollough will only make $100K as a consultant and he won’t even start collecting until next January, which is more than six months after he becomes a consultant. That’s downright frugal.

Of course, now that Circuit City stock has recovered somewhat (though still well below what it was in 2000), McCollough’s extensive stock holdings — 335,000 restricted shares and 3.8 million exercisable options as of the last proxy — means that McCollough,56, won’t exactly be eating Ramen noodles. Still, given that most CEOs walk away with a bundle of stock and all the other bells and whistles, Circuit City gets a footnoted.org rarity: a gold star — on a Monday, no less. Gold stars have been very rare lately — the last one was in October — and since most companies tend to bury stuff on Fridays, I’ve never given one out on a Monday. But there’s a first for everything. Investors can only hope that more companies pay attention.

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