By Paul Hodgson – Chief Communications Officer
It’s not so much a golden hello. More a golden “hello again”. Or rather a golden “hey-you-never-really-left”.
Here’s an extract from an 8-K recently filed by Scientific Games about a change to the employment contract of chairman and former (and now current again) CEO Lorn Weil. And many thanks to ratings manager Hoang Nguyen for bringing this particular travesty to my attention.
In connection with the amendment, Mr. Weil was awarded sign-on equity awards consisting of one (1) million stock options (with an exercise price of $9.00 per share and a ten-year term) and one (1) million RSUs, which awards have a four-year vesting schedule (one-quarter vesting on December 31, 2011 and on each of the next three anniversaries of such date) (such options and RSUs, the “time-vesting equity awards”). Mr. Weil was also awarded an additional performance-based award consisting of one (1) million stock options (with an exercise price of $8.06 per share (representing the market value of the Company’s stock on the date of grant) and one (1) million RSUs, which awards will vest at the rate of 20% per year if the Company’s “adjusted EBITDA” (as defined below) for a particular year equals or exceeds the adjusted EBITDA target applicable for such year as set forth in the amendment (with the actual vesting date to be March 15 of the following year, assuming the target is met), subject to the “carryover” provisions described below (such performance-vesting options and RSUs, the “performance-vesting equity awards”).
One is tempted to ask whether he stepped down from the CEO position (it was only for a few months) in order to get this golden “hey-you-never-really-left”. I mean, two million stock options and two million restricted stock units? He was already handsomely on the payroll, continuing to get large salary and bonus payments.
So, now the company has had four CEOs in the last three years, albeit two of them were Lorn Weil, whose brother and son, incidentally, also work for Scientific Games.
And back when Mr. Weil was CEO, the stock was trading in the $30s, not at $8 or $9 which means that if he gets the stock price back up to where it was in the first place he will make a very large amount of money while everyone else will just manage to recoup their losses. Except for those involved in the option exchange program (this is a fancier way to describe repricing) – which won't include shareholders, clearly – who will just have their losses wiped out.