Vic,Be Wary of Smooth Operators
For instance, did you know that:
priceline gave its chief operating officer, Jeffery Boyd, a $2 million, 6.56% loan to buy stock in 2000, and later forgave the note. If priceline sells out to another company with deeper pockets -- even with the stock down so far -- Boyd will receive an amount equal to two times his base annual salary of $300,000.
Former priceline CEO Daniel Schulman received two loans over the past two years: one for $6 million at 5.82%, and another for $3 million at 6.4%. Then the company forgave $4.5 million of these loans. Incidentally, despite priceline's horrific stock price nosedive in 2000 (from near $100 in March to near $1 in December), Schulman's base salary increased more than 33% to $400,000 a year beginning Jan. 1, 2001. (Schulman was replaced by Richard Braddock as CEO on May 8, 2001.)
Braddock, who is also priceline's chairman, did repay a $3.3 million loan to him during 2000. But the company forgave $294,000 in interest that had accrued on the loan.
W. Michael McCadden -- priceline's chief marketing officer -- also has a nice golden parachute. In the event of a change in control at the company, he'll be paid two times his base annual salary of $300,000.
In other words, while stockholders took it in the wallet, management took care of themselves. |
