ClearSign CEO gets golden handshake

Originally published December 20, 2014 at 8:00 pm Updated December 21, 2014 at 8:50 am

By Seattle Times Staff

For the second time, Richard Rutkowski has been dethroned as leader of a local public company.

Just weeks after boasting to shareholders of ClearSign Combustion about “one of the most exciting and productive periods in the company’s history,” Rutkowski is out as chairman and CEO.

But he’s not leaving empty-handed: The tiny Seattle developer of emissions-control technology will pay Rutkowski two years of salary totaling $750,000, according to a Securities and Exchange Commission filing.

That wouldn’t be much at some large enterprises, but it’s more than eight times all the revenue the 7-year-old ClearSign has ever reported.

Add in a $40,000 bonus promised for this year’s work, and the future payments amount to a quarter of the cash ClearSign has on hand. The golden handshake also comes with accelerated vesting of options and a year’s worth of benefits.

Rutkowski, who’d led the company since 2008, agreed not to sue or disparage or compete with ClearSign.

A company spokesman said it would have no further comment.

Reached at home, Rutkowski declined to comment except to say the parting arrangements were “all according to the employment contract.”

That contract would have expired Jan. 1 had it not been renewed in March for two years.

At Bothell-based Microvision, after a dozen years of uninterrupted losses, Rutkowski in 2006 was ousted by the board, as he acknowledged in news reports at the time. Microvision subsequently sued him, saying he owed $1.7?million in overdue loans; he countersued for $15 million. Three years later Microvision settled the litigation after recouping about $260,000.

At least Microvision had a small stream of cash from partnership deals; ClearSign does not.

The company, which says its technology makes flames burn cleaner and more efficiently in industrial and commercial boilers, furnaces and such, has raised about $23 million from investors, including an IPO almost three years ago. Its market capitalization is about $70 million.

But aside from $93,000 received last year from a collaborating company, ClearSign conceded in March that “we have earned no significant revenue since inception on Jan. 23, 2008.”

In what turned out to be his final media release last month, Rutkowski held out hope that “we may begin to generate revenue” in early 2015 from test installations of the company’s technology. He also said the company’s remaining cash of $3.3?million could suffice at least through the first quarter.

Perhaps that scenario didn’t satisfy the board or wasn’t materializing as described.

Although ClearSign issued a statement in which board member Scott Isaacson expressed “our heartfelt gratitude to Rick for his vision,” the company did not even give the standard “pursuing other interests” cover to its announcement of Rutkowski’s resignation.

The company said Stephen Pirnat, a ClearSign board member for three years, will take over as chairman and CEO in January.