Gold star Fridays return…

Hard to believe that the last time we handed out a gold star, there was still snow on the ground. It hasn’t been for lack of trying! But this 8-K filed by Raytheon (RTN) earlier this week clearly makes the cut.

Last week, at the same time it reported second quarter earnings, Raytheon announced that it “intends to explore strategic alternatives” — corporate-speak for sale — for Raytheon Aircraft Company, which had $745 million in sales during the quarter. In the 8-K it filed a few days later, Raytheon provided details of the retention bonus being offered to RAC Chairman and CEO Jim Schuster. But unlike the typical retention agreement in this situation, (AT&T and any number of the major bank mergers come to mind here) which basically provides a huge pot of cash for the executive to play golf for a few months and copiously avoid any real work, this one actually seems to have some thought put into it.

That’s because Raytheon divided the retention bonus into a Part 1 and a Part 2. So Schuster gets a nice bonus — a year’s salary and bonus (around $1.2 million based on last year’s proxy) — 20 days after the closing. But the far bigger reward — two times salary and bonus — only happens if Schuster sticks around for two years after the closing. That’s a far better deal for Raytheon investors, not to mention whatever company winds up buying RAC. And so it deserves a rare gold star.