Mortal payout!

May 17, 2004

When Neil Nicastro stepped down last May as CEO of Midway Games (MWY) , the company, which makes popular video games including Mortal Kombat, wasn’t exactly on a winning streak. The stock was trading around $2, the company had missed revenue estimates by a mile, CALPERs was targeting the company for having lax board oversight, and analysts said Nicastro lacked credibility. But Midway’s board didn’t view any of that as reasons to penalize Nicastro, 47, who remains chairman of the board. According to the proxy filed last week, Nicastro received a $4 million severance payment when he made way for new CEO David Zucker. That’s nearly 7 times his annual salary of $600K. But that’s not all: he’ll also collect another $1.9 million in May 2006 that the proxy describes as deferred severance. Until then, he’ll receive the quarterly interest on that money, which can be coverted into nearly 600,000 shares of stock at $3.28 a share. All told, Nicastro’s “other compensation” added up to $9.5 million last year.

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