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Golden parachute for Iomega's Edwards
By Stephanie Miles and Dawn Kawamoto
Staff Writers, CNET News.com
March 23, 1999, 5:55 p.m. PT
Iomega's former CEO received a severance package worth nearly $800,000 last year, although the company lost $54 million in 1998, according to documents filed with the Securities and Exchange Commission.
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.
<<<<<
GARY
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As most should know, Jim Sierk did not come from Rockwell Automation. I sent the following e-mail to Stephanie Miles, one of the authors of the article.
Stephanie,
Thanks for the recent article entitled "Golden parachute for Iomega's Edwards". One correction, however....James Sierk didn't come to Iomega from Rockwell Automation. Rather he came from Allied Signal and was elected to Iomega's BOD due to, among other things, his
expertise in quality assurance with emphasis on the application of six sigma. He took over as interim CEO after Kim Edward's departure and ran Iomega until the hiring of Jodie Glore.
Here is James E. Sierk's bio from the SEC's "FreeEDGAR" site:
James Sierk was raised in
western New York. After
graduation from the Warsaw High
School he attended Rutgers
University on an athletic
scholarship. He graduated with
a bachelor of science degree in
chemistry in 1960 and
immediately entered the Marine
Corps as an infantry officer.
He served in the U.S. and
Southeast Asia and attained the
rank of captain. After his
active Marine Corps service,
Mr. Sierk attended Rensselaer
Polytechnic Institute and
received a master's degree from
the School of Management
Engineering.
Following graduation, Mr. Sierk
joined Xerox Corporation, then
a $300 million company. He held
operations positions in
manufacturing and product
development and was named to be
the first vice president of
materials management in 1972.
Subsequent positions included
responsibility for U.S.
manufacturing operations and
operations in the Far East and
the Americas. In 1989, he was
named to lead Xerox's
successful effort to win the
Malcolm Baldrige National
Quality Award. In 1991, Mr.
Sierk joined AlliedSignal as
the senior vice president of
quality and productivity and a
member of the Leadership
Committee. During the
subsequent seven years he led
the change processes, including
Six Sigma, which allowed the
senior management team to
transform the company. By his
retirement in late 1997, he had
been responsible for the
functional leadership of
materials management,
marketing, manufacturing,
information technology,
centralized business services,
research and technology, and
quality.
Mr. Sierk served as interim
president and chief executive
officer of Iomega from March
through October, 1998 while a
search for a president and
chief executive officer was
underway. He serves as a
director for Ames Rubber
Corporation. Mr. Sierk is an
active member of various civic
and professional organizations
including the Malcolm Baldrige
Award. The Secretary of
Commerce has appointed him to
successive positions as a
judge, chairman of the judges'
panel, an overseer, and as
chairman of the board of
overseers of this national
business excellence award.
Jodie glore DID come from Rockwell Automation.
Here is Jodie K. Glore's bio from the the SEC's "FreeEDGAR" site:
Jodie Glore was born in Burley,
Idaho and grew up in Ontario,
Oregon. After high school, he
enrolled in the United States
Military Academy at West Point
and graduated in 1969 with a
bachelor's degree in
engineering. He later spent 13
months in Germany and then
served in Vietnam for a year
with the 101st Airborne
Division. After being selected
to teach at West Point's
Department of Behavioral
Sciences and Leadership, he
earned a master's degree in
1975, with honors, in
Industrial and Labor Relations
from the University of Oregon
in Eugene, Oregon.
Mr. Glore's post-military
career began in 1979, when he
joined Allen-Bradley, now part
of Rockwell Automation, as
supervisor of special projects
for the company's Programmable
Control Division at Highland
Heights, Ohio. He supervised
and managed new product
development, marketing planning
services and product marketing
within the Programmable Control
Division until 1984, when he
was appointed director of
product management for
Allen-Bradley's Sensing
Division in Milwaukee,
Wisconsin. In 1985, Mr. Glore
joined Square D where he held
several management positions.
He was corporate vice president
of sales and marketing, with
sales exceeding $1.3 billion
annually, when he left in 1992
to rejoin Allen-Bradley as
senior vice president for the
Industrial Computer and
Communications Group, which
later became known as the
Automation Group. He was
appointed president of
Allen-Bradley in 1994.
In 1995, Mr. Glore was
appointed as president and
chief operating officer of
Rockwell Automation, a leading
supplier of industrial
automation products, systems
and software in North America,
and a division of Rockwell
International. Mr. Glore led
Rockwell Automation's growth
from $2.1 billion to $4.5
billion in just four years.
During his tenure at Rockwell,
Mr. Glore held several senior
management positions, including
corporate senior vice president
of Rockwell International and a
member of Rockwell's Corporate
Strategy Committee. Mr. Glore
was named chief executive
officer and president of Iomega
in October 1998.
Mr. Glore served as chairman of
the board of Reliance Electric
from 1995 until 1998 and was
elected as a member of BF
Goodrich's board of directors
in September 1998.
David Colvin
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