A very good deal at Ross Dress for Less

February 20, 2015

Anyone who’s ever shopped at a Ross Dress for Less knows what to expect: fluorescent lights highlighting piles of off-price clothes and shoes. Shopping there is more about the hunt for a good deal than anything else.

Judging by this 8-K filed earlier today, a former Ross executive has found an unusually good deal — one most Ross shoppers could only fantasize about.

For the next two years, Doug Baker, the former chief merchandising officer at Ross’ dd’s DISCOUNTS, will collect his regular base salary of $960,000. He’ll also get bonuses — up to 75% of his base salary — and accelerated vesting in stock. All told, it works out to just over $7 million.

In a curt, one-sentence filing back on Jan. 28, the company disclosed that Baker’s employment had “terminated” that day. The filing didn’t provide further details but a three-paragraph press release seemed to downplay the departure by noting that he was “leaving” the company, with Ross Executive Chairman Michael Balmuth praising Baker for “numerous contributions over the years as a merchandising executive at both Ross Dress for Less and dd’s DISCOUNTS.”

In this Women’s Wear Daily story (which is behind a pay wall), Baker’s departure was described as a firing, which makes sense to us. After all, you rarely find 20-year executives departing the very same day the announcement is made.

What is clear is what he could get over the next two years — for doing nothing. Usually, companies require the executive to remain with the company under the euphemistically titled “consulting” agreements. But in this case Ross appears to have dispensed with that pretense. The only thing that Baker is actually required to do under the agreement is not compete and not try to hire any Ross executives or employees.

Over the years of reading filings, we’ve come across some pretty amazing examples, including this former “Footnote of the Year” winner. Indeed, today’s disclosure is so amazing that we’re surprised it wasn’t filed as part of the Friday Night Dump.

Posted in: Agreements, Benefits, Compensation, D&O Turnover

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Companies Mentioned: Ross Stores, Inc.,
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