Big grants give NetLogic exec plenty to celebrate…

February 22, 2012

While the champagne corks were probably popping in California last week after Broadcom Corp. (BRCM) completed its $3.7 billion acquisition of NetLogic Microsystems, Inc. (NETL), the party may have continued for one of NetLogic’s former top executives, thanks to some big stock grants that he got last year.

The Summary Compensation Table from the 10-K/A (filed February 17, the same day the companies announced the completed deal) disclosed that NetLogic’s former CEO and president, Ronald Jankov, received $5.1 million in total compensation for fiscal year 2011 – quite a nice jump from the $3.2 million total compensation package he received for fiscal year 2010. His salary and bonus accounted for just over $1.21 million of that, about 24% of the total number. The rest – $3.88 million – was in the form of stock awards, an increase of almost $1.7 million over the stock awards he got in FY 2010.

Jankov got his stock grants in two awards last year, according to the filing. He got just over $1.82 million in a grant of 46,000 shares on February 7, 2011 (which would have vested May 15, 2014); and he got $2.06 million in a grant of 69,000 shares on September 2, 2011 (which would have vested November 15, 2013).

The filing also states that Jankov and NetLogic entered into a change of control agreement in April, 2011 that included “modified acceleration terms” if a change in control occurred. We know that Jankov has joined Broadcom as a Senior Vice President and General Manager, reporting to an Executive Vice President in the Infrastructure & Networking Group. He may carry on there for years. But if he is terminated other than for cause, or is involuntarily terminated in the next 12 months,

“…each outstanding equity award held by the officer that is not fully vested on the date of termination of employment will immediately vest in full as of the effective date of such termination.”

That involuntary termination clause could come into play if Jankov is sent packing without cause, but it could also benefit him if his new job doesn’t carry at least as much responsibility as his old one, or he gets a “material reduction” to his salary, or he’s forced to relocate more than 50 miles from where he now lives but doesn’t want to move.

Of course, accelerated vesting may work its magic on Jankov’s prior equity grants, too. The filing disclosed that the value of Jankov’s accelerated stock awards and stock options is more than $15.4 million, assuming a change of control had occurred on December 31, 2011.

As such, Jankov is sitting pretty as he starts his new chapter with Broadcom, with enough money to even spring for a $275,000 bottle of Shipwrecked 1907 Heidsieck, if he really gets the urge to celebrate in style.

Image source: Close-up of bottle of champagne via Shutterstock

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