Golden parachute for Iomega's Edwards
Documents show that Iomega's former CEO received a severance package worth nearly $800,000 last year, although the company lost $54 million in 1998.
Kim Edwards--who was ousted as CEO and president of the struggling storage maker after disagreements with the board--still received a severance package worth nearly $800,000 in 1998.
Since the demise of rival Syquest last year, Iomega is the only major player in the removable storage market for computers. Still, the company has struggled to turn a profit, as analysts question the strategy of selling high-profit disks for low-margin drives.
Edwards, who resigned last March, received $500,000 in cash and 40,000 options valued at $295,000. The company also extended Edwards a $5 million loan with an interest rate of 5.7 percent. The loan is to be paid back in five, $1 million annual installments starting this April 15. The loan is secured by Edwards' Iomega shares.
During Edwards' time at the helm, Iomega was criticized for selling more products, including its popular Zip removable drives, than it could support. The company was criticized for product flaws, such as the so-called Click of Death and for a spotty record in honoring rebates.
Edwards resigned on March 25, 1998. During the months that he worked at Iomega last year, he earned $150,000. He also cashed in 2.9 million shares, valued at $19.3 million.
Edwards was replaced by James Sierk, a board member who took over as president on an interim basis. Sierk, who joined Iomega from Rockwell Automation, took home no salary last year, but received more than 60,000 shares of stock, worth $420,000.
Jodie Glore, who replaced Sierk as the permanent CEO in October, earned $110,000 in base salary and a bonus of $210,769. In addition, he received 2.1 million options, valued at $5.4 million based on a 5 percent appreciation.
Glore's employment contract calls for him to earn a base salary of $600,000 in the current fiscal year, and a bonus equal to 100 percent or more of his base salary.
Iomega reported earnings of 7 cents per share in the fourth quarter, the first profitable quarter last year. Still, quarterly income dropped 47 percent year over year, from $36.1 million to $19 million.
Edwards was not the only Iomega executive to walk away last year. Fred Forsyth, who held the position of president and general manager of the professional products division, and Ted Briscoe, executive vice president and chief marketing officer, both announced they were leaving the company at the end of 1998.
Forsyth took home $414,423 in base salary with a $124,327 bonus, according to the filing. He also received 250,000 stock options. Briscoe received a base salary of $306,154 in 1998, with an $88,385 bonus and 250,000 stock options. These compensation packages apparently do not include any severance pay.
Iomega could not be reached for comment.