And now, severance parking…
Here at footnoted, we’re always fascinated by the odd things that departing executives ask for on their way out the door. One can only imagine the high-powered negotiations that take place over things like the Mercedes, the corporate jet, and even the executive’s office furniture — all things we’ve found in severance agreements over the past few years. Keep in mind that lawyers for both sides are involved in these sorts of negotiations, which no doubt makes the cost of negotiating some of these goodies — Blackberries and laptops pop up virtually ever day — more valuable than the item being requested.
The latest weird perk to join this growing list is a parking spot at Jacksonville International Airport for departing Continental Airlines (CAL) CFO Jeffrey Misner, who is retiring at the end of August. But this isn’t just any parking spot — it’s free lifetime parking. As the severance agreement filed on Friday notes, Misner,54, is entitled to the free spot as long as he lives within 200 miles of Jacksonville Airport and as long as Continental maintains operations at the airport.
The agreement also includes a non-compete clause and gives Mr. Misner nearly $3 million dollars in exchange for his remaining stock options. But it’s the free lifetime parking that really stands out, if for no other reason that this was a point of negotiation. Granted, parking at the airport can be a giant pain, but it still seems like an odd thing to ask for on the way out the door.
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Posted in Tags: CFOs, executive exits, odd filings |
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July 21st, 2008 at 10:22 am
Did the agreement specifically say a parking spot for an automobile? Perhaps he’s asking COA to pick up the tab for a small Cessna Citation he’s got parked at the airport itself. Most airports charge by the type of plane, so someone with a 172 is going to pay less than a multi-engine or light jet. I’m surprised he didn’t ask for a gas card on his way out too.
July 21st, 2008 at 11:07 am
Good question. So I went back to the agreement and it doesn’t specifically say automobile. Here’s what it says:
Continental agrees to provide at no expense to Executive a parking space at the Jacksonville, Florida (JAX) airport in a lot that is the same or similar to the lot available to airport-management personnel. Such airport parking shall be provided beginning on the Retirement Date and during Executive’s lifetime (so long as Executive maintains a residence within 200 miles of JAX) if and for as long as Continental serves JAX and has such parking available to it. Notwithstanding the foregoing, to the extent that the benefit described in this paragraph 4 and any other miscellaneous separation pay benefits subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), that are provided to Executive during the six-month period beginning on the Retirement Date have an aggregate value in excess of $15,500, Executive shall pay to Company, at the time such benefits are provided, the fair market value of such benefits, and Company shall reimburse Executive (with interest thereon at the Aa Corporate Bond Rate (as defined in paragraph 3.5(vii) of the Employment Agreement, but determined as of the last day of the second month preceding the first day of the month coinciding with or next following the Retirement Date)) for any such payment not later than the fifth day following the expiration of such six-month period.
July 23rd, 2008 at 8:59 pm
Another, somewhat humorous example of odd severance provisions can be found at Texas Roadhouse [TXRH]. Their Chairman, CEO, and COO each receive a “crisp $100 bill” if they’re fired without cause:
“The 2007 Employment Agreements provide that, except in the event of a change in control, no severance will be paid to Messrs. Hart, Taylor or Ortiz upon termination of employment, but each is entitled to receive a crisp $100 bill if his employment is terminated by us without cause before the end of the term. “