Barnes and Noble

Annual Meeting: September 14, 2016 Barnes & Noble proxy statement released July 29, shows shareholders see the final amount of the severance received by former CEO Michael Huseby. He has resigned in August 2016 “for good reason” and received a total severance of over $15 million. In 2014, the company paid a severance of $3.6 million for the prior CEO, William Lynch, who resigned in July 2013. Next year’s proxy statement will include the final figure on another CEO severance package. On August 16, 2016, the company announced that his replacement, CEO Ronald Boire would be leaving the company because he “was not a good fit for the organization.”

The final tally of his severance isn’t immediately clear, but his employment agreement provides details. (Thanks to @AmyLeeRosen for posting this on twitter today.) The three-year employment agreement, effective on September 8, 2015 provides that he will receive a severanace of two times the sum of his salary and bonus. Boire’s annual salary was $1.2 million. His bonus, as reported in the summary compensation table was $1.7 million. In the proxy statement issued less than a month ago, the company estimated that this cash component of a severance package would total $4.8 million.

But of course, there’s more. As employment agreements are, the language is dense. He will receive “the aggregate annual dollar amount of the payments made or to be made . . . [for] providing you with the benefits set forth in Sections 3.3, 3.6 and 3.7 above.” Let’s break those down:

• The first of these, section 3.3, is the monthly car allowance of $1,500.00, “or such higher amount as may be determined by the Compensation Committee.”

• The next Section 3.6 is general employee benefits: “including vacation, to which you are entitled under the employee benefit plans or policies that the Company provides for its employees generally, as well as any employee benefit plans or policies that the Company provides for its executive officers generally.”

Let me note, that the first part of that phrase (italicized here) is standard, but the second part is a more recent addition to the lexicon of employment contracts. That’s right kids, I’m so old that when I first started looking at proxy statements, employees and executives typically received the same benefits. (I’m not that old.)

• Section 3.7 relates to his “life insurance policy providing for a death benefit of U.S. $2,500,000.00 . . . . and (b) a disability insurance policy providing for monthly payments to you of U.S. $12,800.00 . . .” That annual disability payment would be over $153,000 a year. I don’t have the actuarial knowledge to determine how much you would have to pay to get that kind of insurance for a 55 year old man, but I expect it would be significant.

Small independent bookstores have been making a comeback lately, but the large chains are struggling. There are many theories as to why this might be. Perhaps careful readers can find some clues above.