EMC-Dell deal The Dell-EMC buy may not be the best possible outcome for EMC’s Federation, but the bitterness will be sweetened for EMC head honcho Joe Tucci by a possible near-$30m payout when he leaves next year.
Analysis of a 30 April, 2015, EMC proxy statement (PDF) for the EMC AGM, by an exec pay research firm called Equilar, found that Joe Tucci could receive up to $27.2m if there is a change in control at EMC and Tucci leaves within two years of that happening.
That would be calculated as 2.99 x base salary + target bonus = accelerated equity awards. As part of this, Equilar included a $9m performance-based award that became Tucci’s in February.
The proxy statement text needs a research firm to analyse it. Here’s a sample from page 57:
Since the 2012 Leadership Development and Performance Award was incremental to Mr. Tucci’s annual compensation, the Compensation Committee set a rigorous revenue target to encourage sustained growth. IT spending growth over the past two years was significantly slower than the Compensation Committee originally anticipated.
We achieved 94.8 per cent of the revenue target, which resulted in 18.7 per cent of the 2012 Leadership Development and Performance Award becoming eligible to vest. In addition, our share price did not perform as well as expected relative to the S&P 500 Technology Index over the two-year period, such that Mr. Tucci did not earn any portion of the 2012 Leadership Development and Performance Award based on our TSR results.
The Compensation Committee determined that Mr. Tucci achieved all of the specific qualitative goals, which resulted in 20 per cent of the 2012 Leadership Development and Performance Award becoming eligible to vest
Imagine interpreting your pay slips at this level to find out if they're accurate.
Another scenario that Equilar found could apply is a payment to Tucci of $15.3m if there is a qualifying termination connected to a potential change in control.
Why should we be bothered at these amounts when a $67.1bn merger is in prospect and Joe’s max payoff would be just 0.04 per cent of that - peanuts in the great scheme of things?
Yes, but every EMC product and service offering sold is paying for that. Do we want the disparity between CXO-level pay and that of the ordinary salaried peon to be so grotesquely huge? ®