PeopleSoft gives CEO a severance boost
The board pumped up CEO Craig Conway's "golden parachute" severance package a month before Oracle launched its hostile bid for the software maker, according to a regulatory filing.
In May, the PeopleSoft board issued a significant increase in Conway's severance package, should the Pleasanton, Calif.-based company undergo a change in control. While some industry watchers wonder about the timing of the increase, it was not related to last week's $5.1 billion cash bid from Oracle, said PeopleSoft spokesman Steve Swasey.
"The compensation committee of the board periodically reviews the CEO's compensation to ensure that it is competitive with market compensation practices," Swasey said. "At the time of the decision to amend Mr. Conway's employment agreement, the company had no expectation that Oracle would launch a surprise, hostile, tender offer for the company."
According to a filing Thursday with the Securities and Exchange Commission, Conway's severance package includes two years of his base salary and a target bonus. If there is a change in control, he also gets immediate vesting of all unvested options and restricted stock, and two years of credit of service to the company.
Last year, Conway received a base salary of $1 million, a cash bonus of $1.09 million, an options grant of 4.1 million shares (at exercise prices of $14.88 to $29.29 over a four-year period) and 500,000 shares of restricted stock that would all vest in 2006, according to the filing.
Whether there will be a change in control at PeopleSoft from the Oracle bid is yet to be seen. PeopleSoft on Friday filed a lawsuit against the Redwood Shores, Calif.-based database giant, charging it had made the unsolicited takeover bid in order to interfere with PeopleSoft's own plans to buy J.D. Edwards for $1.7 billion. On Thursday, it rejected Oracle's $5.1 billion bid and said it planned to continue its merger plans with J.D. Edwards.