Rank-and-file Engineers and new compensation plan
Upon further reflection, the new compensation plan does not appear to cover the rank-and-file engineers of IDCC as I first assumed. It is the rank-and-file engineers who seem to be the most productive IDCC employees, and the ones most deserving of additional compensation. They are the ones who are cranking out the patents at an accelerating rate, and incorporating our IPR into new products. From the latest 10K page 18 as follows:
...”As of March 1, 2004, we employed 311 full-time individuals consisting of approximately 232 engineering and product development personnel, 12 patent administration and licensing personnel and 67 other personnel, as well as 9 part-time employees.”
From the press release announcing the new compensation plan as follows:
...”Beginning in April 2004, a broad group of managers and executives, representing about one-third of InterDigital's workforce, will participate in a program which provides both a cash incentive award tied to long-term company performance goals (LTI) and a grant of restricted stock units.
Therefore the new compensation plan appears to be aimed at approximately 100 of IDCC’s managers, executives, supervisory-type personnel, and probably licensing personnel. I would imagine that those engineers in management, executive, and supervisory positions would be part of the new compensation plan, but not the 200 or so rank-and-file engineers. I’m guessing that maybe 32 of the 232 total engineers are in management, executive, or supervisory position.
Thus IDCC’s estimated $7m of additional compensation for 2004 under the new plan, or an average of $70,000 per covered person, will be given to IDCC’s managers and executives. What have these people accomplished that they are so deserving of very significant amounts of additional compensation? Virtually everyone agrees that the managerial and executive talent at IDCC is not on par with the technical talent at IDCC.
I don’t think that there has been hardly in voluntary turnover at all in IDCC’s managerial ranks. My guess is that they have been, are, and will be compensated at IDCC far more than they can earn anywhere else. Thus employee retention has not ever been a problem in IDCC’s managerial and executive ranks. It is the productive rank-and-file engineers that I would think would be more susceptible to leave IDCC and go elsewhere. This new compensation plan does very little, if anything, for them.
I certainly hope that the proxy will provide more details about the new compensation plan. I still have numerous questions about this plan. I just wish that the shareholders could vote on this new compensation plan, but I don’t think so. IDCC’s Compensation Committee is apparently just going to shove this one down our throats, like it or not. If we don’t like it, then the only recourse we have is to vote against compensation committee member Roath, who is up for reelection this year.
AI
