What does $425K a month buy IDT?
Motti Lichtenstein, CEO of the IDT Telecom subsidiary of IDT Corporation (IDT), departed on April 1 “to pursue other business opportunities” (press release here). If I were Mr. Lichtenstein, I’d be in no rush to find those opportunities, given the nice post-separation deal he and IDT have cooked up. (IDT has been a bit of a frequent flyer here, and Lichtenstein’s generous bonuses were footnoted back in 2006. The company is controlled by founding Chairman and former hot dog vendor Howard Jonas.)
On Monday, IDT filed an amended 8-K, attaching both this separation agreement and this consulting agreement for Lichtenstein. (The separation agreement is oddly titled “confidential” and has a clause requiring both parties to treat it that way. Perhaps IDT intended to keep the details to itself until some spoilsport attorney told them they’d better file the contracts with the SEC.)
Despite last quarter’s news that revenues at IDT Telecom continued to deteriorate, the separation agreement bestows on Lichtenstein $3.3M in severance, to be paid in three installments ($2.6M on April 15, $200K on June 15 and $500K on December 10).
The consulting agreement, which runs until December 15, requires Lichtenstein to give “general business advice and feedback” as well as “input” on “specific business proposals and opportunities.” The arrangement is non-exclusive, so Lichtenstein can moonlight as a consultant elsewhere if he likes. For this less than full-time gig, IDT will pay him a startling $425K each month.
Exercising my arithmetical powers, I note that between the two agreements Lichtenstein will collect $6.7M in cash this year. Nevertheless, the press release says IDT is engaged in a “cost reduction program.” Maybe that’s why the separation agreement forces Lichtenstein to hand back all laptops, Blackberries, cellphones, and whatever else he has “that IDT may not know of.”
Marc Oppenheimer, who became COO only in January, is leaving as well.