Foster Wheeler’s Sweet Swiss Assignments…

January 22, 2010

As foreign work assignments go, Switzerland surely must be on a lot of short lists.

For two executives at Foster Wheeler AG (FWLT), a global engineering and construction contracting company, those assignments come with some very nice benefits… especially if they tough it out for a few years.

The company announced last month that it was moving its operating headquarters to Geneva. The agreements are between a Foster Wheeler subsidiary and Franco Baseotto, the executive VP/CFO/Treasurer, and with Beth Sexton, the executive VP, Human Resources. According to this filing, amendments to the employment agreements are being made because the relocation to Switzerland would allow the executives to terminate their employment “for Good Reason.”

That may be technically accurate, but it’s hard to believe that highly-ranked executives are going to jump ship just because the boss asks them to work in Europe for a few years. In this case, the company said that to avoid any doubt, the maximum length of the assignments would be five years.

Foreign assignments generally come with nice benefits: moving and housing allowances, regular business-class travel back and forth to the States, tax gross-ups, tuition payments for children’s schools, etc., and Baseotto’s and Sexton’s agreements are no exception.

But it’s the “stay bonuses” and future stock awards that seem more unusual. In Baseotto’s case, he “will receive a stay bonus equal to 175% of his annual base salary upon the earlier of entering into a New Addendum to the Baseotto Agreement or June 30, 2011, provided he remains in active employment until such date.” According to the proxy filed last September, Baseotto’s base salary was $550,000. That means that if he can tough it out in Switzerland for about a year and a half, he’ll receive another $962,500. The agreement also says that the stay bonus “will be increased if Mr. Baseotto remains in active employment beyond June 30, 2011,…” provided he gives the required advanced notice before he resigns. [Sexton’s agreement has a similar provision to give her 175% of her base salary, which was $388,360 as of Jan. 1, 2009. Thus, if she stays with the company until June 30, 2011, she’ll get another $679,630.]

As if that wasn’t enough of a sweetener to take the hardship assignment of moving to Switzerland, there’s also the restricted stock: $2.5 million for Baseotto that vests over three years.

If the competition among Foster Wheeler’s executives for assignments in Switzerland wasn’t tough enough already, it probably is now.

Image Source: Historic Hotels of Europe

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