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Corporate Chutzpah of the Week Award
Just when you think corporate boards have exhausted all methods of heedlessly stuffing shareholders' money into executives' pockets, someone finds a new way.
At its annual meeting November 12, JDS Uniphase, the Milpitas, California, telecom equipment maker, will ask shareholders to let company executives increase the size of their equity incentive pool by 40 percent, to 42 million shares from 30 million. That would represent 20 percent of all the company's outstanding shares.
What has the company's executive bonus pool bought so far? Not exemplary performance: JDS said this week that its fiscal first-quarter loss widened to $16.4 million, or 8 cents a share, from $6.9 million, or 3 cents a share, a year ago. JDS shares have fallen almost 60 percent this year, compared with the less than 35 percent decline in the tech-heavy Nasdaq Composite Index.
Nor, apparently, is the bonus plan buying executives' loyalty. In a Securities and Exchange Commission filing yesterday, the company disclosed that chief executive Kevin Kennedy will quit at the end of the year to take another job elsewhere.
Kennedy notified the company of his plan to leave last Friday. Coincidentally, the San Jose Mercury News notes, that was about nine days after a restricted stock grant vested, giving Kennedy 100,000 shares of JDS Uniphase. (The grant was part of a new employment contract signed last year, which also bumped up his salary by 39 percent, to $800,000.)
Mercury News blogger Jack Davis also notes that the company awarded Kennedy 175,000 instantly vested "deferred stock units," which it agreed to give to him as soon as he left the company "for any reason."
Icing on the cake: JDS Uniphase agreed to give Kennedy a "minimum" of 375,000 restricted stock units "no later than the last business day of the first fiscal quarter" of 2009.
Those shares, worth $3.8 million at the time, were granted August 29. That was not quite two months before Kennedy said he would decamp to Avaya, a telecom equipment maker in New Jersey.
by Mark Stein
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