The new golden parachute: Apple’s iPad…
If two data-points make a line, according to the old reporter’s saw, three make a trend. And by that measure, we’ve seen more than enough executives heading out the door with company-issued iPads to make it a trend.
So let’s make it official: If you’re shown the door to the executive suite, you can snag all the consulting agreements, company cars, lifetime parking and jet-plane rides you like to go with your severance millions. But if you’re a real C-suite maestro, you’ll make sure you get the iPad on your way out. And that it’s guaranteed in writing.
Consider Advanced Analogic Technologies (AATI), a tiny semiconductor company in Santa Clara, California. On April 6, the company announced that Chief Financial Officer Brian R. McDonald resigned (effective almost a week earlier) “to pursue other interests.”
It filed the Separation Agreement and Release it entered into with McDonald, which gave him $392,333 in cash (or 16 months’ pay) as severance, it promised him $110,344 as a partial bonus for the year, and another $31,600 for “miscellaneous expenses,” including “costs related to Executive’s personal automobile,” tax-prep costs, and legal fees.
Notably, the company tried to keep secret a mysterious section 1(e), but filed an 8-K/A this past Friday with the complete agreement, showing he also was eligible for as much as another $110,344 if the company was acquired within 12 months. In between the two filings, wouldn’t you know it, the company said on May 26 that it would get bought by Skyworks Solutions (SWKS).
But back to the iPad: As a further parting gift, Advance Analogic gave McDonald some shiny new gadgetry in return for his old, company-issued gear:
“The Company agrees to give Executive a new laptop computer, cellular phone, and iPad purchased by the Company, with the express understanding that Executive will promptly return the laptop computer, cellular phone, and iPad that are currently in Executive’s possession, and that he shall not otherwise maintain any confidential or proprietary information belonging to the Company. The Company shall report as income to Executive the fair market value of the laptop computer, cellular phone and iPad and shall withhold from the other cash payments specified in the Agreement such required tax withholding. The Company will not pay for or provide service for Executive’s Cellular Phone or iPad.”
This isn’t the first time that we’ve called out companies for promising to hand out iPads with pink slips. In November, we footnoted a severance agreement that General Growth Properties (GGP) had inked with its new chief, letting him keep his iPad (as well as his Blackberry, laptop and cell phone) if he were to get the boot. And in August, we pointed out that Energy XXI (EXXI) was letting a departing chief operating officer keep his iPad, as well as his home security system and 2010 Range Rover, as part of a sweet separation package.
Still don’t believe it’s a trend? A quick search through the SEC’s database turned up a seven other examples since November. Among the other companies letting bigwigs keep an iPad as a consolation prize or parting gift, from most to least recent: GameTechInternational (GMTC), Carmike Cinemas (CKEC), TD Ameritrade (AMTD), Nautilus (NLS), Interpublic Group (IPG), Medtronic (MDT), and Scotts Miracle-Gro (SMG).
Because, really, what self-respecting executive wouldn’t insist on keeping the device? It says you’re detail-oriented. It says you sweat the small stuff. It says you’re too cheap to spring for a $500 gizmo.
And it strongly suggests you put a lot of value on status, perks and cool gadgets — maybe more than you do on, you know, shareholder value, since someone (read: a high-priced attorney) is taking the time and trouble to write this stuff into a contract. In short, it says a lot about you, and, maybe, a little about why you’re on your way out in the first place.
Here at footnoted, we love Apple gizmos as much as the next decentralized information-age outfit in the Cloud — the average number of Apple devices per member of our team hovers somewhere north of five, and one of us has owned at least a half-dozen Apple computers, three iPhones, and a smattering of iPods over the last couple decades. But hard as we’ve tried (and believe us, we’ve tried!), even we haven’t been able to figure out a business case for the iPad.
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