The $250,000 a month consultant…

December 19, 2005

Is any consultant really worth $250,000 a month? Is there any idea, any service, any anything that can possibly be worth that kind of money? That’s the question that investors in Maguire Properties (MPG) need to ask themselves this morning. Actually, the $1.5 million over the next six months is just the guaranteed base rate. On Friday — about two weeks after the company announced that co-chief executive Richard Gilchrist was retiring, the REIT filed this 8-K with Gilchrist’s separation agreement.

Though the company noted in the press release that Gilchrist, who returned to the company in 2002 and was instrumental in Maguire going public in June 2003, it waited until the 8-K to provide any real details of Gilchrist’s departure. According to the agreement, Gilchrist is guaranteed $1.5 million on July 15, 2006. He’ll also receive a $250K fee for the completion of various tasks, up to a maximum of another $1.5 million. Plus, he’ll receive $300 an hour for each hour he actually works. Not too shabby for what appears to be a part-time job.

Granted, Maguire has done well since going public at about $20 a share. But it hasn’t exactly been too difficult for REITs to do well these past few years and other REITs, like Arden Realty (ARI) have done better.

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