The multiplier effect at Sybase…

Yesterday afternoon, SAP (SAP) announced that it planned to acquire Sybase (SY) in a deal valued at $5.8 billion. As we often do when a big deal is announced, we went digging through Sybase’s filings looking for any pre-merger signals – the types of things we often write about on footnotedpro, but came up empty-handed.

Still, we couldn’t help but openly gape when we took a closer look at the proxy that Sybase filed a month ago. There on pg. 45 are the details of Chairman and CEO John Chen’s post-deal payday of $30 million, the bulk of it in accelerated vesting of stock options, restricted stock and stock appreciation rights. But when you start to dig in to the number, you realize that the $30 million is really significantly higher.

That’s because that number is based on Sybase’s closing price on Dec. 31 when the stock closed at $43.40. But SAP is paying considerably more — $65 a share — and since the bulk of Chen’s compensation is in stock, a little back of the envelope math shows that the $30 million listed in the proxy is really closer to $42 million. Now, granted, Chen has been at Sybase for a long time, so while the number is a big one, it’s not nearly as offensive as some other deals we’ve seen where a newly installed CEO collects millions for a few months on the job.

Chen isn’t the only Sybase executive to benefit from this multiplier effect. Four other executives — CFO Jeff Ross as well as three other group presidents — stand to collect around $8 million each, compared with the $5.7 million listed in the proxy.

Then again, shareholders win here too, given the 56% premium to Tuesday’s closing price.

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