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Moving up by moving on down the road…

images-5.jpegThe employment agreement filed Tuesday for Walter Rakowich, President and COO of ProLogis (PLD), notes that his employment “shall terminate upon his death.” I’m glad the lawyers made that clear, because I’m not confident he’d exhibit the proper work ethic at that point.

In addition to stating the obvious, the contract gives Rakowich the right to quit, with full severance pay, if his office relocates “more than 30 highway miles” from the desk where he now sits and sips his lattes. A nice thing for him, but not at all unusual. As Footnoted’s readers may know, employment deals routinely contain the right to a payoff if an executive chooses to resign for what’s called ‘Good Reason”: a cut in pay, a request to perform duties unbefitting a bigshot — or a move to a new workplace that’s more than a specified distance from the current one.

We’re not talking relocation to China here. The magic number is quite commonly in the range of 30 to 50 miles.

Rakowich’s contract isn’t insanely generous and ProLogis stock got some good press this week, so I’ll stop picking on him. Instead, let’s pick on Richard Wohl of IndyMac, whose behemoth of a contract Michelle footnoted on Friday. If Wohl’s office were to move, say, 51 miles from where it is now, he could politely decline to go along and instead reap $3.5 million or more in cash, immediate vesting of his equity awards and his entire wad of severance benefits, including the 10 years’ medical/dental/vision coverage for his entire family that Michelle mentioned. (Wohl’s contract, I’ll note in passing, contains enough material for a week of posts, if not its own HBO mini-series.)

Sure, packing up your coffee mug and family photos is a nuisance. But these relocation clauses, which treat moving a few exits down the highway like a forced transfer to the Far East, seem kind of nutty.