In two days, Paul N. Saleh will show up for his first day of work as Computer Sciences Corporation’s (CSC) new CFO. Saleh is a veteran in the world of corporate finance, starting his career with giants such as The Walt Disney Co. (DIS) and Honeywell International, Inc. (HON). In recent years, though, he has [...]
In two days, Paul N. Saleh will show up for his first day of work as Computer Sciences Corporation’s (CSC) new CFO. Saleh is a veteran in the world of corporate finance, starting his career with giants such as The Walt Disney Co. (DIS) and Honeywell International, Inc. (HON). In recent years, though, he has worked for companies treading more troubled waters, such as Gannett Co., Inc. (GCI) and Sprint Nextel Corp. (S). CSC may not have the name recognition of some of those other companies, but it apparently had no problem coming up with a pile of money to bring Saleh on board.
A recent Wall Street Journal brief highlighted the basic points of Saleh’s compensation package ($700,000 base salary, a target bonus of 100%, and 35,000 Restricted Stock Units), but it didn’t mention that CSC is also giving Saleh $8.4 million more in equity awards, as disclosed in this recent 8-K and described as follows:
“…for each of the Company’s next three fiscal years (beginning with 2013, our current fiscal year), he will be granted an annual long-term equity incentive award with an approved value of 400% of his annual base salary, in each case with terms and conditions generally applicable to awards granted to other senior executive officers of the Company.”
That’s worth $2.8 million a year, 60% of which will be distributed as performance-vested restricted stock units, and the other 40% as stock options. Saleh may also receive “Career Share” RSUs, and he is eligible to participate in the Severance Plan, which will give him protection if he is terminated because of a change in control.
Saleh certainly has his work cut out for him. Late last week, new CEO Mike Lawrie acknowledged CSC’s $4.2 billion annual loss by stating in a press release that accompanied the earnings report, “We consider these results to be very poor as the Company is executing well below an acceptable level for CSC and its investors.” According to Reuters, Lawrie promised investors a “multi-year journey” to turn the company around, the first step of which is to cut expenses by $1 billion over the next 12-18 months.
Along with finding enough pennies here and there to add up to $1 billion, Saleh will also have to help Lawrie renegotiate the unprofitable, multi-billion-dollar contract with Britain’s National Health Service, sort out 40 other troubled contracts, and navigate an SEC investigation. In an 8-K filed last Friday, CSC’s departing CFO, Mike Mancuso, replied to an analyst’s inquiry asking about updates on the matter by answering:
“It’s still continuing. We expect the internal investigation to be coming to a conclusion soon. Our 10-K, when we file it, will status all the numbers, any financial, or accounting fall-out of the investigation as it exists up to this point in time. Beyond that, Jason, I just can’t get — it’s an independent investigation, and we just can’t get into the discussion of it.”
But Saleh will soon know all about it, as well as about the other challenges that the company faces. And – for his sake – we hope that he’s a good distance swimmer.
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