Quote of the Day - Retirement at sixty-five is ridiculous. When I was sixty-five I still had pimples.
All $37 million of it.
Admittedly, that's quite a going-away present, but it's still less than tonight's $42M Super Lotto. Yours (and my) chances of a $37M departure bonus is just about as good as holding the winning ticket). Still, if I got that kind of money for quitting, I wouldn't be happy to discover that it's stuck in escrow.
The SEC under SOX can force "extraordinary" payments to employees into escrow if the agency starts an investigation of the publicly traded company. You probably didn't know that the company that publishes TV Guide made that much money, or for that matter, tried to pay $37M to two top execs.
The Ninth Circuit is the first federal circuit court to determine what "extraordinary" payments means. Here, the two execs got severance payments of five to six times their base salaries.
The SEC then started an investigation to - you guessed it - determine if the company had overstated revenues and understated liabilities. That investigation forced the $37M into escrow, and the execs have been fighting for two years to get it out of escrow and into their accounts.
The Ninth Circuit said, "do not pass go, do not collect $37M." Oh yes, and by the way, welcome to TV (Guide) hell.
How much would have avoided escrow? We don't really know. Senior Judge Steven Trott said, " 'out of the ordinary' means a payment that would not typically be made by a company in its customary course of business." What's typical in corporate America? Not much these days.
That guidance is about as clear as mud.