Carl Icahn is one of the towering figures of activist investing, so when Michelle spotted a curious employment contract from Icahn Enterprises (IEP) at the Friday Night Dump — filed in an 8-K just two minutes before the Securities and Exchange Commission closed its virtual window — she jumped on it.
She wrote up what she found for our friends over at DealBook, and it’s worth a read: After losing some trusted talent, Icahn has locked up deputy Vincent J. Intrieri with $6.5 million in salary, and (as Bloomberg News noted) a $600,000 penalty if he so much as discusses another job opportunity. If Icahn extends Intrieri’s contract at the end of 2013, he gets an additional $1 million in salary.
But with the benefit of a little more time to peruse Intrieri’s new employment agreement over the weekend, we found some other interesting tidbits that give a sense of what it’s like to work for a high-profile investor like Icahn. Certainly, Intrieri has been well compensated so far: The agreement mentions a $2 million capital account in Icahn investment vehicles, as of August 31, which Intrieri can keep there, or take out any time. Meantime, if Icahn sacks Intrieri without good reason, Icahn still has to pay him through at least year-end 2013, though he gets to offset those payments with any other income Intrieri receives in the meantime. That’s nice job security, but it comes at a price: The agreement specifies that Intrieri must “be on call at all times” and maintain a home office “with a dedicated phone line, personal computer and such other reasonable office equipment which Employee deems to be necessary…”
More interesting, Intrieri also has to keep his mouth shut, and apparently about a lot more than just business.
The agreement has one of the more sweeping non-disparagement clauses we’ve seen recently, presumably in large part because of Icahn’s intimate connection with the businesses that have borne his name since the late 1960s. In signing the document, Intrieri agreed that
“all personal and not otherwise public information about the Related Persons, including … all information regarding or concerning Carl Icahn, his family members and all of the other Related Persons shall constitute Confidential Information…”
“Confidential Information,” of course, can’t be disclosed under the agreement’s terms, and those “Related Persons” are defined to include Icahn Enterprises, “its Affiliates, and any of their respective officers, directors, agents or employees (including but not limited to Carl C. Icahn, his family members and his and their Affiliates).”
By our count, that’s two mentions of Icahn’s family — so far. But the agreement gets more specific still:
“In no event shall Employee during or after his employment hereunder, disparage Mr. Icahn, his family members or any of the other Related Persons. Employee further agrees not to write a book or article about Mr. Icahn, his family members or any of the other Related Persons in any media … and further agrees to keep confidential and not to disclose to any third party, including, but not limited to, newspapers, authors, publicists, journalists, bloggers, gossip columnists, producers, directors, script writers, media personalities, and the like, in any and all media or communication methods, any Confidential Information.”
That seems pretty clear, and tells us something about Icahn’s concerns. (Of course, Icahn’s online bio doesn’t even have his photo with it, so maybe it shouldn’t be a surprise.) Presumably the tradeoffs are well worth $6.5 million a year to both Icahn and Intrieri.
The non-competition provision is equally sweeping, but surprisingly, it doesn’t last terribly long: If Icahn wants to extend Intrieri’s contract but Intrieri declines, the non-compete period would last only through the end of 2014, a year after the contract’s end date. And if Icahn doesn’t even seek to extend the agreement, Intrieri would be free to compete the day after his contract expires.
