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Compuware execs could get millions in golden parachutes [Detroit Free Press](Detroit Free Press (MI) Via Acquire Media NewsEdge) Nov. 07--Compuware CEO Bob Paul would receive a $6.7-million golden parachute if the buyer of the technology company lets him go. Chief Financial Officer Joseph Angileri would get $4.5 million and General Counsel Daniel Follis Jr. $2.3 million. They are among six current and one former top executives at Detroit-based Compuware who could get $23.6 million in cash, stock and benefits. The potential payouts were disclosed in a securities filing this week in anticipation of next month's shareholder vote on a $2.5-billion deal in which Compuware would sell itself to a private equity firm that focuses on software and tech firms. The document also said Compuware intends to pay Goldman Sachs $18.5 million for being its financial adviser for the transaction. Compuware's top executives stand to receive the multimillion-dollar compensation packages if they are terminated without cause, or compelled to resign for "good cause," such as a mandatory relocation to a distant city. The compensation agreements would only be triggered if a firing or resignation happens within one or two years after a change in control of the company. Begun in the 1980s amid the era's hostile corporate takeovers, golden parachute contracts are now a common component in friendly deals, such as the pending acquisition of Compuware by the Thoma Bravo private equity firm. At least one outside observer was surprised Thursday by the size of Compuware's possible golden parachute payouts. Compuware, which sells business information technology software and services, has experienced declining revenues since its late-1990s and early-2000s heyday. "It's a lot of money for a company this size that hasn't been a rocket ship success," said Erik Gordon, a professor at the University of Michigan's Ross School of Business and its law school. Both Compuware and Thoma Bravo declined to comment for this report. When the tenative deal was announced in September, Compuware's CEO said he expected the company to remain in Detroit and that management would remain in place. But he could not rule out layoffs under the new owner. The company employed about 3,000 people worldwide this fall, including 1,200 in its downtown headquarters. Since that announcement, Compuware has disclosed plans to split off its declining mainframe computer business from its faster-growing application performance management business, known as Dynatrace, leaving the Compuware name with the mainframe unit once the acquisition deal closes. That decision leaves the prospect of a Compuware solely dependent on the shrinking mainframe business. The company reported that its mainframe business saw a nearly 13% revenue decline last fiscal year and is forecast to drop another 7% in the year ending March 31. Professor Gerald Davis of U-M's business school said that golden parachute deals can be advantageous to a company's shareholders and not just the executives, as they provide incentives for negotiating deals that may be good for a company's future -- yet not their personal job security. "It sort of clears the heads of management so they can negotiate the best deal without having to worry about their own situation," he said. Contact JC Reindl: 313-222-6631 or [email protected]. Follow him on Twitter @JCReindl. Size of Compuware golden parachutes --CEO Bob Paul: $6,675,073 --CFO Joseph Angileri: $4,550,663 --General Counsel Daniel Follis Jr.: $2,346,262 --Kris Manery, senior vice president of mainframe: $1,033,046 --John Van Siclen, general manager APM: $5,987,869 --Christopher O'Malley, president of mainframe business: $2,692,929 --Laura Fournier, former CFO: $284,656 Note: Payouts would only be triggered in the event of a firing or a "good cause" resignation Source: SEC filing ___ (c)2014 the Detroit Free Press Visit the Detroit Free Press at www.freep.com Distributed by MCT Information Services |