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DALLAS_Former
RadioShack Corp. Chief Executive Dave Edmondson, who resigned
Monday following questions about his resume's accuracy,
will receive a cash payout worth at least $1.03 million,
the company said Tuesday in a regulatory filing. |
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Edmondson
began receiving four quarterly payments of $243,750 _
totaling $975,000 _ on Tuesday. He also will receive $57,692
for accrued, unpaid vacation, plus an undisclosed amount
for accrued and unpaid salary by Thursday. |
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The
Fort Worth electronics company did not identify the total
value of the severance package, which also includes four
months of insurance coverage and the ability to exercise
outstanding stock options and restricted stock awards
early. |
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The
cash payout identified in the regulatory filing is about
two-thirds of the $1.53 million he made in 2004 for salary,
bonus and other compensation as a chief operating officer,
according to the company's most recent proxy statement.
The company has not reported 2005 salary and compensation
for its senior executives. |
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Edmondson, 46,
joined RadioShack in 1994 and has been a senior executive
since late 1998. He served two years as senior vice president
and 4 1/2 as chief operating officer _ a tenure worth
more than $6 million in salary, bonus and compensation.
But his May 2005 appointment to CEO lasted less than one
year. |
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His troubles
began last week after a Fort Worth Star-Telegram story
identified false information on his resume. |
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Edmondson claimed
on the resume that he had received degrees in theology
and psychology from Pacific Coast Baptist College in California,
which moved in 1998 to Oklahoma and renamed itself Heartland
Baptist Bible College. |
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The school had
no records of the degrees, and Edmondson acknowledged
the information about the degrees was "incorrect." |
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Mel Fugate, assistant
professor at Southern Methodist University's Cox School
of Business, said the severance package and the resignation
raise questions about whether Edmondson received favorable
treatment. |
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He wonders if
a rank-and-file employee would receive the same consideration
as Edmondson if their resume contained errors. |
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That question
was posed to the company last week, but it didn't answer. |
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"This highlights
the need for better disclosure and understandable disclosure
rather than legal speak and hiding things in filings,"
Fugate said. "RadioShack employees could be outraged
if indeed his treatment is different from what they would
get." |
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Parting ways
with Edmondson on Monday _ and on the heels of playing
host to a two-day conference with analysts _ was hardly
hasty, analysts said. |
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"If you
are a member of the board, the question you want to ask
is why let this thing fester?" said Donald Trott,
analyst with Jeffries & Co. "You are open to
getting continuous inquiries from shareholders, the media
and analysts. If this is the direction you ultimately
are going to go, you might as well get it over with." |
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RadioShack's
chief operating officer, Claire H. Babrowski, is serving
as CEO while the company conducts an outside search. |
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Bob Damon, North
American president for the corporate search firm Korn/Ferry
International, said even with a strong internal candidate,
it's essential to extend the search externally. |
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"It's their
fiduciary responsibility to shareholders to tell them
they did an exhaustive search internally and externally,"
Mason said. "It establishes a benchmark, but you
don't want the internal candidates to think they are the
benchmark to find someone better; it's important that
they be considered a serious candidate." |
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Several analysts
who track RadioShack have long been impressed with Babrowski,
even before the Edmondson flap. |
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Bear Stearns
analyst Christopher Horvers agreed, writing Babrowski
is "a welcome change. We think that Ms. Babrowski
will get serious consideration to retain the top spot
as the search unfolds." |
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Analyst Bill
Baldwin, of Baldwin Anthony Securities, suggested that
RadioShack's board of directors bring Chairman Leonard
Roberts back as CEO and let Babrowski move forward with
the recovery efforts. Roberts served as CEO for six years
before being replaced by Edmondson. |
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"If I was
the board, I would give Claire a chance to show her stripes,"
Baldwin said. "Let her see what she can do in the
tunaround." |
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What's ahead
for Babrowski, however, is daunting. |
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On Friday, the
company told Wall Street analysts its fourth-quarter earnings
fell 62 percent and it would close 400 to 700 stores,
plus two distribution centers. |
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Horvers wrote
that an upcoming turnaround effort could be make or break
RadioShack, adding that the company could become a candidate
for a takeover. |
