This post is by Michelle Leder from footnoted*
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Back on July 1, Ralph Lauren filed this 8-K providing separation details for its CFO, Robert Madore. While the company had previously announced Madore’s plans to step down, it waited until after the markets closed on the eve of a three-day holiday weekend (the Fourth of July) to provide Madore’s compensation details.
We’ll go out on a limb here and say it probably had something to do with the $2.5 M in severance spelled out in Madore’s severance agreement. In exchange, Madore had to stick around until Sept. 30, which is today. In our experience, people who get that type of severance aren’t usually in a rush to land their next gig. Indeed, most agreements that we’ve seen spell out that an executive is prohibited from working for a similar type of business. That’s what the severance payment is for – to tide someone over so that he doesn’t to dip into his kid’s college fund. But when we checked Ralph Lauren’s agreement with Madore, it only locked him in until Sept. 30.
That being the case, perhaps we shouldn’t have been so surprised to see this 8-K that American Eagle filed just after 5 pm on Thursday, Sept. 29: It named Madore as its next CFO. According to his employment agreement, Madore will be paid a base salary of $850K and receive a $500K signing bonus. He will also get about $750K in equity and moving expenses.
Madore will take the next month off, however. He’s not slated to start at American Eagle until Oct. 28. Hopefully, he’ll figure out a nice way to spend that $2.5 M in severance.