Personal reasons again…

December 13, 2005

Ever since last week, the liberal blogosphere has been talking about how Diebold (DBD) CEO Wally O’Dell, would be stepping down because of shareholder lawsuits over insider trading. And yesterday, after the market closed, Diebold made the official announcement citing the oft-abused “personal reasons” yet again. (Note to PR folks: nobody buys that line anymore. Just say what really happened). But the company has yet to file an 8-K, which leaves us all guessing on exactly what sort of sweeteners O’Dell will receive to leave the company, or even providing official word that the departure actually happened. But judging how the stock is up over 7% so far this morning, investors seem pretty happy that O’Dell has decided to go away. Guess those folks aren’t worried about whatever it is that prompted O’Dell to leave in the first place.

A quick skim of his employment contract, which was last filed in the company’s 1999 10-K and weighs in at 65 pages including various exhibits, leaves a bit of uncertainty over how much O’Dell will walk away with. For example, if he was fired for cause, he’s supposed to get no severance and only has 30 days to exercise a whole host of options. But if there was no cause, he could get 24 months of pay plus a large goody bag of other items. The options here aren’t insignificant. According to the most recent proxy, he received 90,000, or 18% of all options granted, though in fairness, those options are way underwater right now, even with the recent surge.

My guess is that something happens to those underwater options to sweeten the pot. But that’s just a guess. Stay tuned.

UPDATE: Diebold filed an 8-K with yesterday’s press release just shy of 2 p.m. But it didn’t include any details of the goodie-bag. My guess for that filing is next Friday at around 4 p.m.

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