Compuware Adds ‘Change In Control’ Payments For Top Execs
DETROIT — Compuware Corp. has made itself a little less tasty a takeover target.
In a filing with the United States Securities and Exchange Commission, the Detroit-based IT management software and services provider disclosed new agreements with senior executives that will pay them big bonuses if Compuware changes hands and they lose their jobs as a result.
The filing said the deal covers “certain executives of the company,” including CEO Robert C. Paul, president and COO Joseph R. Angileri, and CFO Laura L. Fournier.
For Paul, the bonus will consist of a lump sum equal to two years’ salary plus the target annual cash bonus in the fiscal year in which termination of Paul’s employment occurs. Angileri and Fournier will get a lump sum of 18 months’ salary plus bonus.
In Compuware’s most recent fiscal year, Paul was paid $691,667 in salary, Fournier $541,667 and Angileri $470,455. (Paul’s total pay listed on Compuware’s July 19, 2012 proxy statement was $11.9 million, due mostly to stock options valued at $9.6 million and $1.2 million in payments under a “non-equity incentive plan.” For the same reason, Fournier’s total pay listed on the proxy was $1.9 million and Angileri’s was $16.4 million. Angileri’s stock options alone were valued at $12 million.)
On Jan. 25, Compuware turned down an $11-a-share buyout offer from a New York hedge fund, Elliott Management. Compuware chose instead to spin off its Covisint business communications unit, selling 20 percent of it on the open market and distributing the other 80 percent of its stock to existing Compuware shareholders. Compuware said the offer undervalued the company. Compuware also announced it would begin paying a dividend of 50 cents a share and would cut costs $60 million a year. Since then, its stock has reached as high as $11.88 a share. It closed Thursday at $11.74, down 8 cents or 0.7 percent.
The SEC filing said the “change of control severance agreements” were authorized by the compensation committee of Compuware’s board on Feb. 8. The agreements will continue in effect until Dec. 31 and will be automatically renewed for a year as of Jan. 1 thereafter, unless there’s a change in control of the company, in which case they’re extended for two years.
The agreements say the executives can still be fired for cause, “generally defined to include certain failures by the executive in performing his or her duties, or conduct materially injurious to the company.” And the executives can quit and still collect if under a new owner they experience “substantial diminution in duties or responsibilities, reduction in base salary, required relocation of greater than 25 miles, and certain failures of the company to pay compensation and benefits otherwise due or to fulfill certain contractual obligations.”
The agreements also include continued life, disability, accident and health insurance to the executives and their dependents.
More at www.compuware.com.