Put Your Money Where Your Desk Is
Although gold stars are normally reserved for Fridays, Footnoted decided to start the weekend a bit early. Today’s shiny star goes to NII Holdings (NIHD), formerly known as Nextel International, which provides wireless service throughout North and South America. NII recently named long-time Board member and former executive Steve Dussek as CEO, where he will work alongside veteran and Board Chairman Steve Shindler. Dussek’s employment agreement, while friendly and familiar, is fairly standard until the end of the letter, when the Company offers the following advice for its new CEO:
We would like you to consider making a commitment to NII through an investment in our shares of at least $1,000,000 when the first trading window opens and at the latest 3 months after your start date. Then we would expect you to gradually increase your holdings up to our policy of 5 times base salary after 5 years.
Given that Dussek’s base salary will be $725,000, that’s asking for a considerable chunk of change upfront — and aligns Dussek’s interests with that of NII’s shareholders. NII has been in a bit of a freefall over the last six months, so asking for a serious commitment from management is good news for suffering shareholders.