Sweet deals for Rite Aid’s exes…

April 17, 2009

While I couldn’t find the exact article by WSJ reporter Mark Maremont that launched Rite Aid’s (RAD) steady decline, I’m pretty sure it was around 10 years ago. (Why that amazing article can’t be found easily with a few clicks of a mouse is another problem for another day, but it shows why newspapers are in the mess they’re in). But I was reminded of that article when I came across something interesting buried in Rite-Aid’s preliminary proxy.

While the problems at Rite Aid have been long-standing, as footnoted Contributing Editor Wendy Fried documented here, the company continues to chug along making seemingly dumber and dumber decisions. How else to explain paying $8 million in severance to three Rite Aid executives who left last year in yet another corporate reorganization?

Former Chief Operating Officer Robert Easley was hired in the fall of 2007 and lasted about a year. While Rite Aid forgot to remove Easley’s profile from its site, it did manage to fork over $3.3 million in severance for Easley. Did we mention that he only worked there a year? On his Linked In profile, Easley says that he is “seeking an opportunity to join the senior leadership team of a strongly capitalized and growth oriented organization. An organization with a strong brand and commitment to people.”

The two other executives who “left to pursue other interests” — Chief Administrative Officer Pierre Legault and former CFO Kevin Twomey — received $3.1 million and $1.6 million respectively. Needless to say, none of this found its way into the press releases or any subsequent filings. If it had, we’re guessing that there would have been more than few complaints.

While we certainly understand contractual obligations, isn’t it time for Rite Aid’s board to ask whether Mary Sammons, who was brought on to fix the mess created by Alex Grass, the son of Rite Aid’s founder, Alex, is making more of a mess than she’s fixing?

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