From Detroit Free Press
VAN BUREN TOWNSHIP, MI — The top legal officer at Visteon Corp. is leaving the auto-parts maker and will be paid $1.36 million as part of her resignation package.
Van Buren Township, Mich.-based Visteon laid out the details Wednesday of the amicable departure of Stacy Fox as senior vice president and general counsel for the nation’s second-largest auto supplier, effective March 31.
Fox, 51, also is to receive a $40,000-a-month consulting contract with the maker of automotive interiors, steering components and fuel systems. In addition, financially strapped Visteon agreed to move up the vesting date for 43,000 shares of restricted stock that Fox had received as part of a previous incentive plan. At Thursday’s market price, that stake is valued at $264,020.
The company’s board of directors approved the terms.
The package raised concerns for some corporate governance watchdogs.
“The company feels it is fair because of her tremendous contribution and efforts on behalf of the company,” said Kim Welch, a spokeswoman for Visteon. “Ms. Fox has been a part of Visteon since its beginnings, and this agreement is a reflection of what her worth and contribution were to the company.”
The severance package for Fox “raises some very serious concerns about the effectiveness of the board of directors at the company,” said Nell Minow, founder and editor of the Corporate Board, a leading corporate governance firm. “It is not unusual for someone leaving a company pursuant to some kind of negotiation. But companies don’t pay somebody for no reason. There has to be some reason that the Visteon feels she’s entitled to this.”
As part of the package, Fox agreed to release the company from any claims she might have against it or any of its affiliates, as well as adhere to a confidentiality agreement. She will also be reimbursed for travel and business expenses. Her monthly retainer will be reduced pursuant to earnings she receives from outside employment.
Fox, who will start consulting April 1, wasn’t immediately available for comment.
Visteon has lost $3.3 billion since it was spun off from its former owner, Ford Motor Co., in the middle of 2000. In that time, the company has failed to turn a profit in nearly four years.
Last fall, Visteon embarked on a corporate restructuring program that called for an estimated reduction of a significant number of its 8,300 white-collar employees in North America through voluntary buyouts.
Those buyout packages were available for salaried workers who joined Visteon in 2003 or earlier. So far, 400 employees have accepted the offer, which ranges from a minimum of 12 weeks salary to a maximum of 52 weeks salary.
The specifics of the deal came to light on the same day — Wednesday — the United States Auto Parts & Equipment Index hit its lowest level — 63.53 — since October 2004. The index tracks the stock performance of major auto parts makers on Wall Street.
Visteon also admitted Wednesday to recording inflated company profits from 2000 to 2004 to the tune of about $132 million. The company said it has finished the process of restating earnings for that period.
Visteon stock Thursday fell 13 cents, or about 2 percent, to close at $6.14 a share on the New York Stock Exchange.
“Many general counsels are paid in excess of $1 million a year,” said Ron Peppe, vice president of law and technology for the Association of Corporate Counsel, a Washington, D.C.-based trade group representing more than 17,000 corporate counsels. “The trend for in-house compensation is leaning more towards cash payouts, as options packages have fallen out of favor for accounting reasons.”
Details of Fox’s separation package were listed in a routine public filing the company must submit to the U.S. Securities and Exchange Commission. As an officer, Fox’s separation package would be a matter of public record. Any employment contract she might have signed would not.
“The severance payments are in lieu of any other compensation amounts or bonuses that haven’t already been paid,” Welch said. “This is a move that Ms. Fox has been considering for many months. She’s going to continue to provide service and support on a variety of matters to Visteon. This is a very positive arrangement and a nice way for it to work out.”
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