Playboy: Christie Hefner’s $everance was ju$t right

February 19, 2009

How much is a CEO worth? Its not an easy question. Just ask President Obama, or the top dog at the Post Office.

For Playboy Enterprises, the topic wasn’t so much about pay as is the severance given to Chief Executive Christie Hefner when she left in December after 20 years running the company. What is fair compensation to such a veteran — and the daughter of founder Hugh Hefner — even if she leaves the financially small company (with a huge brand name) at a time when it is racking up losses?

Jonathan Boyer of Boyer Asset Management asked Playboy’s team of executives that question on their quarterly earnings conference call:

Q: Could you just take me through the board’s decision on how it evaluated its fiduciary duty to shareholders regarding the severance package of the CEO? It was I believe a $2 million severance package on a company with a market cap as of yesterday of roughly roughly $50 million, especially in this — I know you said that there was no immediate liquidity problem with the company — but in light of the credit crisis we are facing.

A: Well, the…the board obviously evaluated the many years of Christie’s performance.
Christie had been with the company 33 years, had been CEO for 20 years. She was entitled under….the company’s severance plan to in excess of one-million-six (dollars) and the board thought about what was appropriate and decided it wasn’t in any way a — you know, a violation — of our fiduciary obligations to give her a severance package of two million.

Q: So she was entitled to one-six and got an extra 400,000 and is this payable immediately or over time?
A: It has already been paid.

Nice work if you can get it.

(Photo: Christie Hefner talks during the Reuters Media and Advertising Summit in New York on 1 Dec 2005/REUTERS)


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The 2 million she took is nothing like the 60 yes I said 60 million Hef took a few years ago.

Posted by Steve | Report as abusive

Lets see ,the management of wall street firms got that and more, as bonuses. I don’t get your point, you jealous?

Posted by Tom Davidson | Report as abusive

So what? 2 mil is a small amount to pay for all of her service.
She didn’t do excessively well and the added 400K is a nice thank you for her.
Her dad took 60 Million but that was fine,…it was his company.
They haven’t asked for bailout money, federal loan guarantees either,……So stay out of it.

Posted by RealNeil | Report as abusive

From the picture, Christie Hefner still looks cute. It’s too bad she didn’t work for the magazine in another capacity as well.

Posted by John | Report as abusive

You can post to my centerfold at any time. I attended Northwestern Law School from 1959 to 1962 and went to the Chicago Playboy Club 3 times a week. My law school buddy was a bouncer at your club, and after 4 am my friend and several bunnies used to have breakfast at Mammies on Rush street. I just loved Playboy after Dark at the Chicago Mansion. Your father was so cool then with his Mercedes 300 SL tooling around Chicago.

Good luck with your severance. What are you going to do in your retirement years, take care of “daddy”. Line up.
Best regards, Martin S. Friedlander, Esq, Marty to you. I live down the block from the LA house.

Posted by Martin Friedlander | Report as abusive

She’s entitled to it…she’s built a huge brand name…plus it’s not a bank asking for bailout…if it wasn’t for the credit crunch, this wouldn’t even be “news”….

Posted by Celine | Report as abusive

2 million? Compared to others doing less and with less positive results that is really cheap.

Posted by AE | Report as abusive

So long as the board agrees, there’s nothing wrong with this severance payout even if it is above the contracted agreement, and frankly, this is a pointless piece. I think you just wanted to post something that would get a lot of attention for very little effort and surely putting a name like Playboy in the title accomplishes this.

Posted by Ken | Report as abusive

Sounds like the board was being a bit frugal.

Posted by Bob | Report as abusive

I’m wondering why she didn’t get more. Or more accurately, if: a) would she have gotten more if she were a man? or b) if a man got $2 million, would anyone be complaining about it? I’m thinking she should have received more in the $4-5 MM range.

Posted by Etherialgirl | Report as abusive

Dad controls the company and Ms. Hefner ran it into the ground. Daddy asked her to leave ten years later than he should have. I hope Playboy can be saved. BTW they’re looking for a buyer…

Posted by RFL | Report as abusive