eBay’s million dollar offer…
Back in April, eBay (EBAY) announced that Alan Marks, a veteran communications executive who had spent time at both Nike (NKE) and Gap (GPS), would be joining the company. As the press release noted, Marks was set to join eBay at the end of April and would be relocating to the Bay Area from Portland.
Yet it wasn’t until the 10Q that eBay filed on Thursday that some of the details of that employment are coming to light. According to the offer letter, Marks will get a $1 million bonus “to assist with you with the purchase of a home in the Bay Area.” If Marks stays at eBay for less than a year, he’ll have to repay the full bonus. The agreement also spells out other terms, including salary, options and bonus and six months of corporate housing. What’s also not really clear is why eBay waited until now to disclose a letter dated March 27. Perhaps it has something to do with managing communications.
As we’ve footnoted before, eBay is no stranger to helping its executives when it comes to real estate. But what’s really interesting here is how these types of bonuses — and there’s plenty of them as I first wrote about here — basically make a mockery of the Sarbanes-Oxley rules that prohibit companies from lending money to their top executives. Granted, this isn’t in the same league (or even solar system) as the $61 million in relocation bonuses that Dennis Kozlowski snagged from Tyco once upon a time — one of the reasons the rule became part of SOX. But it does beg the question as to why there’s a rule in place that is so easily flouted?
|
Posted in |
 8 Comments » |
RSS
July 28th, 2008 at 10:57 am
It is no secret that eBay executives live pretty well and get paid pretty good along with stock options!
Their stock price however speaks for itself!
Jim Cramer said it best on CNBC when he said quote….”Someone should buy this company and the ship of fools running it and put eBay out of it’s misery!
July 29th, 2008 at 7:07 am
I have been MSI84 (100% positive feedback) on Ebay for years and last spring I changes Internet service which of course changed my email address. Well Ebay in all it’s wisdom has a new policy that prevents me from changing me personal profile to reflect my new address because it is part of my screen name. What kind of a policy is that? I do not intend to setup another email account. This is the one I use for general email. My mistake was not asking Ebay’s permission to change services. This inflexibility keeps me from listing on ebay. Maybe Mr. Marks can lend a hand in the Customer Relations department.
July 29th, 2008 at 10:11 am
When the SOX prohibition on loans to executives came out, I noted at the time that companies will still give relocation and other money to executives. However, this time the executives have to swear they don’t intend to pay it back. Nice job, Congress.
July 29th, 2008 at 10:50 am
“What’s also not really clear is why eBay waited until now to disclose a letter dated March 27.”
The reason is the SEC (from some reason) doesn’t require disclosure of the actual agreements in the 8K announcing the hiring of executives. When the SEC accelerated 8Ks post-SOX to 4 days they allowed companies disclosing material agreements in 8Ks to wait till the next 10K or 10Q to file the material agreements. The thought being that it was burdensome to try to Edgarize and file the agreements in such a short time period, especially if the company was trying to get confidential treatment for portions of material agreement. Although that makes sense for 400 page loan agreements, it doesn’t make any sense for employment agreements, which are relatively short and for which confidentiality can never be requested.
July 29th, 2008 at 10:58 am
It’s amazing really, how these giant companies throw around a million dollars as if were the loose change found in their sofas.
July 29th, 2008 at 11:46 am
@ CP: Thanks for the insight. I probably should have been clearer in my post and asked why it wasn’t filed as part of the Q that eBay filed on 4/24, since that was nearly a month after the letter was dated.
August 4th, 2008 at 9:15 pm
michigan seo sez “It’s amazing really, how these giant companies throw around a million dollars as if were the loose change found in their sofas.”
Nothing amazing about it.
It’s not their money. It’s the stockholders. Same game the banks played running themselves into insolvency.
Until those running public co’s are forced to repay a large % of their compensation when they #$% up, this will continue.
Heads they win, tails the stockholder loses. We never learn
August 25th, 2008 at 9:21 pm
$ 1.0 Million for housing? I used to live in the Bay Area. You could rent a flat in Sunset District for 5K a month and be right next to Craig!
If you are tired of eBay’s antics, policies and waste of your dollars on exec’s real estate them come over here and support a true grass roots effort. Come see what everyone is talking about.
Bonanzle.com