Down, but not out…
When First Data (FDC) announced on Monday that CEO Charles Fote was stepping down for the oft-abused “personal reasons”, the stock jumped over 5%. And according to the WSJ, during Fote’s nearly four-year tenure, the stock climbed a meager 7%. So how does the company’s board choose to reward Fote for that kind of performance? By giving him a big fat consulting agreement, naturally.
According to this 8-K filed earlier this morning, Fote will receive the same $1.1 million a year he made as CEO, but will only be required to provide consulting services through June 2007. Since the filing oddly didn’t include the actual agreement, it’s unclear how many hours Fote will be required to work, what he’ll be consulting on or whether he’ll be able to do it from, say, the beach. But his consulting fee is more than four times what Fote’s replacement, Ric Duques, who handed Fote the reins in 2002, will be making.
In addition to the normal office space and executive assistant deal, 175,000 restricted shares will vest fully at the end of December, which the company describes as “the principal inducement” for Fote to enter into the deal. That’s roughly worth another $7.5 million, which should be enough to pay for the beach house.