Compuware Exec Scores Big__»

In 1973 — two years before Microsoft (MSFT) was founded — Peter Karmanos, Jr., Thomas Thewes and Allen B. Cutting started Compuware Corporation (CPWR). It went public in 1992 and now has a market cap of $1.89 billion. Headquartered in downtown Detroit, it occupies a sleek building with 1.1 million square feet spread over 15 floors.

Compuware filed its proxy July 14, and the company today has come a long way from its humble origins, when Karmanos and his friends started the company with $9,000 and aspired to create ——a 20 to 25 person company that would be a fun place to work. They apparently succeeded; according to Compuware’s website, the home office has a —…fresh, open design, incredible views, health club, day care facility and many other employee amenities.

Life is even better for Karmanos, the Chairman of the Board and CEO.

He gets a FY 2011 base salary of $1.2 million. That’s the same amount he got for FY 2009 and 2010, but the proxy disclosed, —While the CEO’s base salary is the highest in the peer group, the Board of Directors continues to believe the CEO’s salary is appropriate based on his performance, significant experience and contribution to the Company.

Karmanos also got a bonus of $360,000, stock awards of $3,522,530, and non-equity incentive plan compensation of $ 3,582,000 (he got two-thirds of that in May, 2010; the remainder will be paid in April, 2012). He also got —Other compensation of $ 227,834 — nearly 99 percent of which paid for security services at his home. In all, Karmanos— total compensation package was worth more than $3.58 million.

And he figures prominently in Compuware’s Related-Party Transactions. In FY 2010, Compuware paid

—$1,684,449 in ticket, advertising and suite license fees to certain major and minor league sports venues, including arenas and teams located in Raleigh, North Carolina [home of the Carolina Hurricanes hockey team]; Plymouth, Michigan and Ft. Myers, Florida. These arenas and teams are owned, managed or controlled by entities owned and controlled by interests of Peter Karmanos, Jr.,—

Presumably, Compuware shareholders don—t mind that their company spends so much on Karmanos— other business ventures, although it may be frustrating that the Hurricanes ended the season with a losing record (11th place in the Eastern Conference).

Compuware’s record is somewhat better. Its stock price is up about 22 percent over a year ago; on the other hand, the revenue and net income figures for FY 2010’s 4th quarter and year-end results (released May 20) were mixed.

Maybe next year will be better for the shareholders and the Canes. As for Karmanos – well – he seems to be doing just fine.


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