By comparison to what we’ve seen in the headlines for departing CEOs at troubled financial institutions, Tom Beusse doesn’t exactly have a golden parachute. But the ousted Westwood One honcho isn’t going to be standing in line at a soup kitchen. He’ll be paid by WW1 for a lot longer than he actually worked there.
Back when he went to work for WW1, Beusse signed a three-year contract with a base salary of $700,000 and an annual bonus that could double that amount, with a minimum bonus of $300,000 for 2008.
For termination, his severance package requires that Beusse be paid an amount equal to twice his base salary plus $250,000 – that’s a total of $1.9 million – to be paid in equal installments over two years. He also gets the $300,000 minimum bonus for 2008. Since the termination has occurred prior to January 8, 2009, one-third of each of his two stock options to purchase a total of one million shares will immediately vest. One option has a strike price of $1.63 and must be exercised within 90 days of termination. The other is under WW1’s equity plan for all senior employees and is almost certainly well out of the money as well.
So, it looks like Beusse will yet receive $2,200,000 – and a bunch of worthless stock options. Westwood One, by the way, declined to confirm the calculations by RBR/TVBR.
RBR/TVBR observation: Shareholders may not like it that they have to pay someone for not working, but Beusse’s severance package is not unusual at all – particularly for someone recruited to try to turn around a struggling company. What is unusual is just how short his tenure was. It became clear that he wasn’t really what the board thought he would be, so the CEO was shown the door well short of a year at the helm.