PeopleSoft expands severance packages
Published: 20 Sep 2004 12:10 BST
PeopleSoft has quadrupled the size of the minimum severance package for its employees and doubled it for executives, as Oracle's hostile bid got a recent boost in the courts.
"The [PeopleSoft] compensation committee...approved amendments to the company's severance policies and plans in recognition of the key role employees have played over the past 15 months and are expected to continue to play, and to enhance employee retention by addressing employees' concerns regarding their long-term employment prospects," according to a filing with the Securities and Exchange Commission.
PeopleSoft employees will now receive a minimum of 12 weeks of base pay and health care coverage for a similar period, compared with the previous policy of a minimum of two weeks' pay for each year of service that capped out at three months.
PeopleSoft executives, excluding chief executive Craig Conway, will now receive between one-and-half times to twice their base salary and bonus, in addition to two years of health coverage.
Employees working overseas will receive either the new severance packages or the amount that is called for under their respective countries' laws, whichever is greater, according to the SEC filing.
PeopleSoft also recently accelerated the vesting of options for employees, if a change in control resulted.
On 9 September, a judge for the US District Court for Northern California issued a long-awaited ruling in the controversial antitrust case involving Oracle and the Justice Department, which had sought to block the company's hostile bid for PeopleSoft. The judge ruled Oracle could move forward with its takeover bid.
Oracle, however, still needs to overturn PeopleSoft's anti-takeover measures, otherwise known as a poison pill, and also receive approval from European antitrust regulators.
Under the severance package policy, the packages could be triggered if employees and executives are terminated as part of a change in control at the company.
PeopleSoft representatives could not immediately be reached for comment.
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