The other Deepak Chopra is a busy man…

May 3, 2012

Early last month we footnoted about the other Deepak Chopra — chairman and chief executive of OSI Systems (OSIS), maker of airport X-ray machines and medical devices, not the doctor and self-help entrepreneur — and how he stood to collect $12.5 million in return for staying employed for eight more years. Now he’s back on our radar screen, thanks to a related retirement agreement.

That agreement, filed with an 8-K on Tuesday, pays him another $10 million for retiring, beginning on the same date as he’s scheduled to get his retention bonus: the first day of the year after the year in which he turns 68, or January 1, 2019.

That’s a 67% increase over the $6 million retirement benefit he had been promised under a previous agreement. In addition to those 10 payments of $600,000 each — making this sound a little like a late-night infomercial — he’ll get another $1 million in each of the years he turns 69, 70, 77 and 78, paid as quarterly installments of $250,000. “For avoidance of doubt,” the agreement continues, “the intent is to increase the total benefits to Ten Million Dollars ($10,000,000) payable over a period of ten (10) years commencing at age 68…”

Not that there was much doubt about the intent in the first place. But wait, there’s more! (See?) The agreement continues:

“Commencing with the second year of benefit payments (in 2020), each benefit payment shall be adjusted upward for any calendar year in which the California CPI index for the greater Los Angeles area shall exceed two percent (2%) as follows: the benefit payment made in any calendar year commencing after age 69 shall be increased by the amount by which the CPI index for the prior calendar year exceed two percent (2%). Thus, for example, if the CPI index for 2019 is 3%, commencing January 1, 2020, the amount of each benefit payment shall thereafter be increased by 1% and, if in 2020, the CPI index is 2.5%, then, commencing January 1, 2021, the amount of each benefit payment shall thereafter be increased by an additional .5%.”

For the avoidance of doubt, this is apparently to make sure that Chopra gets every penny he’s been promised, and never mind about anything beyond the most minimal inflation. Oh, and if he’s disabled or dies before he retires, he (or his estate) gets $1 million a year for 10 years; if the company is sold before he retires, he gets $6 million within 90 days and the rest after about a year (albeit discounted for the time value of money). And if the company changes hands after he starts collecting his retirement benefits, future payments get sped (again, adjusted to the net present value).

Finally, all of this is fully vested from the start, so he’s entitled to the benefit whether or not he works the next eight years. If he does work, of course, he’ll also get that $12.5 million retention bonus (which could be higher, depending what happens with his salary and bonus over that time period) — a cool $22.5 million. Not bad.

It’s also worth noting that this retirement benefit has grown pretty rapidly. As recently as June 30 last year, Chopra’s retirement benefit was going to be a mere $500,000 a year over 10 years, starting at age 65, so the benefit has effectively doubled over about nine months, in return for a three-year delay in receipt. At least the company’s stock price has headed in the same direction during the same period, if not quite as quickly. (It’s up 58% since June 30.)

We admit it: We were first drawn into the story for Deepak Chopra, CEO, by the coincidence of his name. But the more we read, the more we think he’s got an interesting story in his own right — or at least an expensive one.

Image source: Illustration of a person meditating via Shutterstock.com

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