Thanks for the memories…

November 14, 2005

It would be a mild understatement to say that Lucent Technologies (LU) spin-off from AT&T wasn’t exactly a ravaging success. Ditto for Agere Systems (AGR) spin-off from Lucent in August 2001. Investors have lost big-time, though in fairness the stock has bounced back from where it was in December 2002.

Still, it seems a bit strange that the person who was running the show at Agere (and had a senior position at Lucent pre spin-off), gets to walk away with a hefty parachute now that he’s retiring at 59. In this exhibit filed in an 8-K late last Thursday, outgoing president and CEO John Dickson is walking away with over $4 million in severance, which includes something called “additional severance payment” because apparently the $3.6 million severance wasn’t enough. There’s also an additional $111K for something called “transition assistance” and full vesting of options. According to Agere’s most recent proxy, Dickson owned 8.9 million shares and last year received 2.5 million shares at $3.54, which represents another significant windfall. Needless to say, when the company announced Dickson’s departure at the end of October, it didn’t mention any of the financial details.

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