Technology: Five Ousted Executives Received More Than $13 Million in Cash
Former Gateway CEO Jeff Weitzen walked away from the job in January with a severance package of more than $5.6 million in cash and nearly $2.5 million in stock options, according to the company’s recently filed proxy statement.
The proxy shows in addition to the cash payments provided to Weitzen, Gateway paid another $7.6 million to four other ousted executives who had signed multiyear contracts, bringing the total in cash severance for the five executives to more than $13.2 million.
Gateway Chairman and CEO Ted Waitt returned to take over the firm’s daily management in January following a year in which the PC maker earned $241 million on revenues of $9.6 million, a 45 percent decline from its 1999 earnings.
The decrease caused Gateway to slash its work force by some 3,000 employees, primarily at its manufacturing operations in South Dakota. It has about 400 workers at its University City headquarters office.
Weitzen, 44, who signed on with Gateway as CEO in December 1999, took home a total pay package last year of just under $2 million.
Weitzen received an annual salary of $1 million, and was awarded a bonus of $880,000. Last year’s pay was an increase over his 1999 pay of $790,000 and bonus of $711,000.
In addition, Weitzen collected nearly $57,000 in other compensation last year , including nearly $32,000 for the personal use of the company plane, and about $25,000 for personal financial planning services. He also received $5,250 in matching contributions for his 401(k) retirement plan.
Weitzen, a former executive vice president with AT & T;, was hired in 1998 as Gateway’s chief operating officer. His first employment contract included a $1.4 million signing bonus, about $93,000 in relocation expenses, about $46,000 in disability and life insurance premiums, and $3,750 for matching contributions to the company’s 401(k) plan.
Paul Bouzan, president of The Executive Group, a San Diego-based career search firm, said he didn’t consider the severance package too large.
“I don’t think it’s excessive. It’s pretty typical of severance packages for executives at that level,” he said.
Upon being promoted to CEO, Weitzen was awarded 1.75 million option shares effective Dec. 8, 1999, and another 250,000 in options in January 2000.
Last year, he sold 100,000 shares and realized a gain of about $4.6 million, according to the proxy.
Weitzen was recently named to the board of directors to OMM Inc., a San Diego-based telecommunications equipment manufacturer.
Other top Gateway executives also received hefty severance packages. David Robino, former chief administrative officer, received a cash severance of $2.8 million, plus accelerated vesting in 273,000 stock options. Last year, Robino took an annual salary of $550,000, plus a bonus of $363,000.
R. Todd Bradley, former executive vice president in charge of global operations, was paid $1.7 million and received accelerated vesting in 31,250 stock options. He was paid $479,583 in salary and $292,600 in bonuses last year.
Clifford Holtz, former senior vice president, was paid nearly $1.5 million in cash and received 26,250 in stock options. Gateway also forgave the balance of a $1 million loan made to Holtz last April to cover his relocation costs. Holtz was paid $354,167 in salary, and a $243,100 bonus.
John Todd, the former chief financial officer, received about $1.5 million in cash, and accelerated vesting of 26,250 stock options. He was paid $412,500 last year and a bonus of $224,400.
