Some allowance…

August 25, 2005

It’s always refreshing to see when the board of directors really takes its job seriously and demands performance from an executive before doling out goodies. Too bad that’s not the case at S-1 Corp. (SONE). In this 8-K filed on Tuesday, the company noted that its compensation committee had approved a 33% raise for Chairman and CEO James Mahan III. In late July, Mahan, who stepped down as CEO in 2000, returned to the CEO job. But the far more interesting part in the 8-K is the “up to $500K allowance to draw upon from time to time for air transportation, housing and automobile expenses.”

Now, to put this in context, take a quick glance at S1’s performance over the past year. Not too pretty, eh? It gets even worse if you go back to the chart for 5 years when Jamie Ellertson took over from Mahan. Ellertson, by the way, will continue to collect his $570K salary from S1 for the next two years, plus some additional goodies.

So who’s the monkey in charge of doling out these rewards when investors have been watching this stock slip away? None other than former Coca-Cola (KO) CEO and Chairman Doug Ivester, who knows a little something about big payouts for less than stellar performance. Ivester is chairman of S1’s compensation committee. When he was forced into early retirement in 2000 at Coke after a little over 2 years in the corner office, Ivester pocketed $120 million according to Business Week.

So to someone like that, a $500K allowance probably seems like pocket change.

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