On December 31, Dell announced that it was reorganizing around major customer segments and that CMO Mark Jarvis and Mike Cannon, president of global operations would be replaced. But don’t feel too badly for them; even in a down economy, they are leaving with some green lining their pockets.
According to an 8-K that Dell filed with the SEC today, each has a significant exit package. Cannon leaves on January 31 with a $10 million cash severance, $5 million of which must be paid by February 20, 2009 and the remaining portion split into two payments by July 31, 2009. He signed a noncompetition and nonsolicitation agreement and will also act as a consultant to the company (If they really need him to do work, why drop him?) through the end of January in 2011. The arrangement calls for another $1.25 million payment to him by January 31, 2010. Dell also pays for the monitored security service at Cannon’s home until February 1, 2011.
Jarvis probably doesn’t fare as well. He leaves January 23, 2009 with a “standard severance arrangement for executive officers.” That includes a full year of base salary, which is $625,000, and target bonus. According to the separation agreement and release he had to sign, an additional $625,000 is supposed to cover the “target incentive bonus payout for Fiscal Year 2009,” so the total would be $1.225 million.
For some perspective, yesterday, Dell’s stock closed at $11.27. The 52 week high was about $26.
Stock chart courtesy Yahoo Finance.
