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