Comverge’s $175 million relocation agreement…

August 2, 2010

The quarterly report that Comverge, Inc. (COMV) filed July 30 left us hoping that the company’s attorneys, accountants, and especially Steve Moffitt, its Executive Vice-President of Engineering and Operations, all have good senses of humor.

We chuckled at Exhibit 10.5 to the Q, the company’s Executive Employment Agreement with Moffitt. Once you get past the standard provisions in the July 1, 2010 agreement (on issues like compensation and benefits, promises to keep proprietary information confidential, a non-compete clause, and so forth), there’s a section about where Moffitt will work.

Comverge wants Moffitt to move from his current city, Houston, TX, to Georgia’s capitol city. It’s giving him nine months to commute back and forth, but there’s an —understanding that the Executive shall permanently relocate within the next nine months of his start date to Atlanta, Georgia.

That’s common enough, as is the company’s promise to pay all the —reasonable direct household moving expenses that the family incurs. So what makes this relocation unique?

The answer is in —Exhibit A to Exhibit 10.5. In exchange for pulling up roots in Houston and transplanting the family to Atlanta, the filing states:

—In addition, in consideration of other relocation expenses that Executive and his family will incur, $87,500,000 will be paid upon the Effective Date of the Agreement and $87,500000 will be paid upon final relocation to Atlanta, Georgia. This relocation stipend includes without limitation expenses required for selling Executive’s residence(s) in Houston, Texas, to purchasing his Atlanta, Georgia house, and all living and travel and other expenses during the process.

We suspect that this is simply a case of typographical errors eluding detection by whoever wrote, proofed, and read the document. Presumably, Comverge paid Moffitt an extra $87,500 when he signed the agreement and plans to pay him another $87,500 after he relocates to Atlanta.

Another possibility, but one that seems less likely, is that Comverge paid him $875,000 when he signed the agreement and will pay him another $875,000 after the move (for a total of $1.75 million).

But we seriously doubt that the company is paying an executive who earns an annual base salary of $300,000 a whopping $175 million to move 792 miles northeast to Atlanta. If that were the case, Moffitt would get more than $200,000 for every mile he’s moving.

So long as Moffitt doesn—t try to collect the outrageous $175 million windfall that the document seems to promise him, Exhibit A seems more likely to elicit laughter, rather than heart failure, in the board room.

Image source: TheMuuj via flickr

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