Dell ex-CEO lands $50m payout
Published: 09 Aug 2007 13:06 BST
Dell's former chief executive, Kevin Rollins, will be paid nearly $50m (£24.6m), despite previous reports that he'd walk away with one-tenth that amount.
Dell said in a report filed on Wednesday that, once the company finally files an annual report, it intends to pay Rollins $48.5m. The money comes in the form of a payment in lieu of stock options, the company said in the report.
Rollins, who resigned on 31 January, accumulated 7.3 million shares of Dell stock options since arriving in Round Rock, Texas, in 1995. According to the company, he could exercise his vested options 90 days after he left the company — 2 August. Dell couldn't allow him to cash out because the company is under investigation by the Securities and Exchange Commission (SEC) and is trying to sort out questions over its accounting.
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Instead, Dell entered into an agreement to pay Rollins the $48.5m, which represents the value of his stock options if he had been able to exercise at the price of $28.67, according to David Frink, a Dell spokesman. The price Dell agreed to pay was the average price that Dell shares closed at the week before Rollins' stock options expired.
Dell compensated 400 other current and former employees whose stock was vested and had expired in the same way, Frink said.
Dell's stock price grew after Rollins took over in 2004. After topping out at about $42 in January 2005, the stock started a descent and the price has remained below $30 since April 2006.
On Rollins' watch, Dell also came under SEC scrutiny and lost market share to HP.
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