Keeping it in the family at Sunrise Senior Living…
When the new proxy for Sunrise Senior Living (SRZ) crossed our desk on Monday, we expected to make quick work of it. After all, in December we’d already footnoted the sweet new pay package lavished on Chief Executive Mark Ordan, and last month noted the unceremonious (if lucrative) axe dropped on former Chief Financial Officer Julie A. Pangelinan.
Instead, we found ourselves spending quite some time with the proxy’s 500-word related-party transaction section, trying to unravel the tangled skein. Some of the details are familiar from past years: the 99-year lease for a piece of land in Fairfax, Virginia, with $13.9 million in rent due over the next few decades; the non-profit funded by the company’s co-founders, Chairman Paul Klaassen and his wife, Teresa Klaassen, (and run at least in part by their daughter) that operates a day-care and rents space from Sunrise to the tune of $197,000 last year.
But new this year was Teresa Klaassen’s job:
“During 2010, Mrs. Klaassen was employed as our chief cultural officer from January 1, 2010 to April 30, 2010. She was paid a total of $40,770 as an employee of our company during this period, including $33,077 of salary and $7,693 representing payment for unused vacation.”
That payment for unused vacation came about because Teresa Klaassen’s job didn’t last quite to Sunrise’s annual meeting on May 4 last year. But losing the job meant gaining a contract with the company her husband oversees, serving as an independent consultant to
“provide the following consulting services to us: advise our chief executive officer and other officers on matters relating to quality of care, training, morale and product development; and at the request of our chief executive officer, visit regions and communities, and attend and speak at quarterly meetings and other company functions.”
Teresa Klaassen’s contract expires April 30 this year, and brings her $100,000 a year.
Now, Teresa Klaassen co-founded Sunrise along with her husband, and Paul Klaassen is listed as still holding something like 6.2% of the company’s stock. But is Teresa Klaassen really the best person to advise the CEO or speak at company functions? Could the company find no one else to advise on training, morale and product development?
After all, saying no to the chairman’s wife isn’t going to be easy, even for an assertive CEO. As Michelle footnoted about a different company six years ago, whenever a big company puts the boss’s wife on the payroll, it’s time for shareholders to ask questions.