More money, less work!

When Rentrak (RENT) announced last week in a press release that F.Kim Cox, an 18 year veteran of the company was stepping down as president as part of a reorganization but would stay on as a consultant, it was one sentence buried in the last paragraph of the release, just above the “About Rentrak” section. But in an 8-K filed that same day, the company disclosed the terms of Cox’s departure: he’ll receive $25K a month through March 2007 in consulting fees, full medical and other types of insurance coverage and a loan for $750K to enable him to purchase his vested options (Hmmm…I thought all new loans were illegal under SOX, though I guess it only applies to current executives). The loan will bear interest and will be required to be repaid by May 2005 or the interest shoots up to over 12%. In exchange, Cox will be required to work all of 20 hours a month. Given that last year, Cox made $252K in salary according to Rentrak’s proxy, the consulting contract represents a 20% raise. But throw in the fact that he’ll only be working 1/10 of the hours he was probably working before and soon we’re talking about a huge increase in his hourly rate. No wonder it was buried.