Emmis Communications didn’t have to look far to find the trustee for its 2012 Retention Plan Trust, which just received 400,000 preferred shares to allocate as employee bonuses. The trustee will also turn over voting control to Emmis, giving the company the more than two-thirds majority it needs to change the terms of the preferred shares and eliminate their dividends.
Emmis CEO Jeff Smulyan found the trustee while looking in the mirror. As of April 2nd, when creation of the trust was approved by Emmis shareholders – with Smulyan voting his majority voting stake in favor – he became the trustee.
Still unscheduled is a second special shareholders meeting at which Emmis management is expected to vote 66.8% of the preferred shares to amend the terms and eliminate their dividends. That will leave them only worth the value of their conversion into two Emmis common shares each.
Other than signing over the voting rights – which is essentially Smulyan assigning them to himself – it doesn’t look like the trustee will have much to do for a while. None of the bonuses are to be paid out to Emmis employees until April 2, 2014.