Sunset on a stint at Sunrise Senior Living…

Companies cut jobs in the name of saving money all the time. Companies also show top executives the door periodically. But rarely do we see a company let a top executive go explicitly as a cost-saving measure, particularly one as senior as a chief financial officer.

Yet that’s the dubious honor that goes to Julie A. Pangelinan, who will be stepping down as chief financial officer of Sunrise Senior Living (SRZ) by March 11 after nearly five years at the company, according to an 8-K the company filed on Monday. Specifically, the company attributed the change as the result of

“the Company’s desire to reduce ongoing general and administrative expense by combining the chief financial officer and chief accounting officer positions…”

At least Sunrise said why it asked Pangelinan to go; we imagine that’s a little better than leaving investors and future employers guessing.

Of course, given the unceremonious farewell, no one will be too surprised to learn that Pangelinan is getting severance: $1.1 million cash (which apparently works out to twice her salary and 75% of her target bonus), plus 18 months’ health-care coverage under COBRA. The remainder of a 2008 option, on 166,667 shares priced at $1.37 a share, will also vest, a value somewhere around $1.16 million at yesterday’s closing price of $8.30 a share.

The company needs a CFO, of course, so it’s giving the title and duties to its current chief accounting officer, C. Marc Richards. (Note to Richards: That’s the same title Ms. Pangelinan started with in 2006; and we note the company draws direct parallels between your new contract and her old one. Just thought you might want to know.)

We can’t say we’re terribly surprised an executive suite might need some trimming, though we’re admittedly more surprised when its occupants draw that conclusion. At Sunrise, revenue has been falling to flat, even as operating income and net income have been improving in recent periods. Sales, general & administrative expense has been bouncing around a bit.

But all this zeal for pinching pennies would be more impressive if we hadn’t read the new employment agreement that Sunrise disclosed on December 2 for Chief Executive Mark Ordan. As we footnoted at the time, he got a $3 million cash signing bonus and an option on a million shares (at $3.94 a share). The cash signing bonus alone would have paid Pangelinan’s total 2009 compensation of $1.2 million more than a couple times over. Plus, in the same 8-K as Pangelinan’s goodbye, Sunrise notes that it offered its chief investment and administrative officer a new contract, complete with a $2 million cash re-signing bonus and an option of 500,000 shares.

Presumably, the Sunrise board and management know their priorities.


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