Let’s add some figures to the COB discussion..
According to last year’s proxy statement , H. Goldberg, as CEO and President, and the highest paid employee received total compensation, including salary ($388,500), bonus ($204,589), other (perquisites)($72,536) totalling $665,625. No options or Restricted Stock Units (RSUs). were granted
H. Campagna, as COB, was granted 50,000 RSUs. In addition, it appears he may have been vested for 16,000 options, and received $15,000 compensation.. The exact date when the RSUs were granted is not known, but according to info in the proxy statement it would have been between Jan 1, 03 and Apr 7, 03. I believe, RSU’s are valued based on the market price when they are granted. During this period IDCC’s stock ranged between a low of $11.50 and a high of $24.14, so the value of the RSU’s would be between $575,000 and $1,207,000. I would say during most of the period a good average price would be around $14.00, which would give a RSU vaue of $700,000.
Based on the RSUs alone, I would say that H. Campagna’s compensation as an ”Outside Director” i.e.:non-employee COB, that exceeds the compensation of the company’s CEO /President, is excessive. I believe that this type of compensation situation is very unusual.
The 2004 proxy statement should be out shortly, so there will be more amounts to look at.
"Each nominee for election to the Board of Directors who is not an officer or employee of the Company (an “Outside Director”) is entitled, upon election or re-election at the Annual Meeting, to receive a grant of non-qualified stock options to purchase shares of Common Stock under the Company’s 2000 Stock Award and Incentive Plan upon their election or re-election to the Board of Directors by the shareholders. These options are granted automatically at the conclusion of the Annual Meeting and provide for the right to purchase 48,000 shares of the Company’s Common Stock (calculated as 16,000 multiplied by the number of years for which the Outside Director was elected to serve), at an exercise price equal to the fair market value of the Common Stock on the date of grant. The options vest one-third each on the date of each subsequent Annual Meeting of Shareholders. Outside Directors who commence service prior to the election of their class receive prorated option grants based on the time remaining prior to the election of their class.
Outside Directors are also entitled to an annual monetary director fee of $15,000 for a full calendar year of service. A pro-rata portion of the $15,000 fee is paid for service of less than a full year. Payment of fees may be made, at the election of each Outside Director, on January 15 of each year, quarterly or deferred. The Company also reimburses Outside Directors for certain expenses incurred in attending Board of Directors and committee meetings and travel on behalf of the Company.
In connection with his service as Chairman of the Board of Directors during 2002, in 2003, Mr. Campagna was awarded 50,000 restricted stock units (“RSUs”). Such RSUs are generally forfeitable if Mr. Campagna ceases to serve as a director before the RSUs vest 2 years after their grant date, do not have voting rights, and are not deemed to be outstanding shares. "
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