Is the glass half-full?

images-1.jpegLast month, we footnoted how Shaw Group (SGR) filed its proxy late on the Friday before Christmas and that in the proxy, CalPERs noted that the company "has some of the most egregious severance and change-of-control provisions ever to catch the attention of CalPERS". The statement was made in the form of a shareholder proposal.

Well, yesterday, Shaw filed this 8-K, which seems to — at least on the face of it — address some of CalPERS concerns. In the filing, the company reduced Chairman and CEO J.M. Bernhard Jr’s employment agreement from a highly unusual 10 years to a more reasonable three years and also reduced the terms of Bernhard’s non-competition agreement. Under the old agreement, which was inked back in April 2001, Bernhard stood to collect $36 million if he resigned for "good reason" — one of those lawyer words that basically means he collects for anything other than being frog-marched out of the corporate suite by federal agents. Under the new agreement that amount is reduced to $8.4 million.

But don’t start taking up a collection yet. Under the second part of the agreement, which spells out Bernhard’s non-compete clause, he stands to collect $15 million for agreeing to a two-year non-compete. Under the old agreement, the non-compete was for 10 years.

Depending on your view of the world, this could be seen as the glass being half-full. After all, $23.4 million is still less than $36 million. We’re also sure that the timing of this arrangement was purely coincidental and had nothing to do with the fact that Shaw’s annual meeting is set for next Tuesday in Baton Rouge. Will this change be enough to sway some shareholders from siding with CalPERS? Stay tuned!