It’s personal…

August 9, 2005

WebMD (HLTH), which last week announced that it was changing its name to Emdeon (let’s hope they didn’t waste a lot of money on consultants to come up with that one!), disclosed in their preliminary proxy that Chairman Martin Wygod had reimbursed the company $236K in 2004 and $230K in 2003 for personal use of WebMD’s employees and offices. But what isn’t clear is why the company is first disclosing this now, given that Wygod has been chairman since 2001. Did he not use those services in prior years or did he not reimburse the company for them? It’s definitely not clear from the filings.

That wasn’t the only interesting filing relating to Wygod. Yesterday, the company filed an 8-K that included this revised employment agreement with Wygod. Under the revised agreement, Wygod’s salary will remain at $1.26 million unless the company successfully spins off WebMD Health. WebMD/Emdeon filed an S-1 back in May. If it does, Wygod’s salary will drop to a mere $975K (which still seems excessive) and he’ll also get 400,000 options and 100,000 shares of restricted stock.

But what seems particularly odd here is that Wygod’s initial employment agreement — a five year contract signed in October 2001 — doesn’t run out for another year. So why is the parent company inking a new five-year deal now when it plans to spin-off WebMD Health? Shouldn’t that company’s board have some say in the matter instead of getting saddled with someone else’s deal-making?

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