Cramer accused of what he has accused others of doing
Steven Davidoff Solomon writes for the New York Times’ Dealbook about TheStreet.com co-founder Jim Cramer, who has been accused by a large investor of the financial news site of not paying enough attention to it.
Solomon writes, “Instead of taking compensation in stock, something executives do to align their pay with performance and their interests with stockholders, Mr. Cramer has not only been selling his shares but also negotiated an employment agreement that was almost entirely focused on cash.
“That agreement requires TheStreet to pay Mr. Cramer 14 percent of the company’s revenue related to Action Alerts Plus.
“TheStreet does not break out revenue from Actions Alert Plus, but Mr. Cannell estimated it at $14 million a year, which would be about $2 million a year for Mr. Cramer. However, this was apparently not enough. Mr. Cramer negotiated that TheStreet guarantee him at least $2.5 million a year, plus $300,000 a year for licensing his likeness.
“This was a significant raise from Mr. Cramer’s previous contract, which paid him $1.476 million in cash the year before, though similar to a contract he had in 2010.
“And it’s not just the cash. Mr. Cramer has a fat-cat package full of those perks Mr. Cannell singled out.
“TheStreet pays for a personal car and driver for Mr. Cramer as well as a personal assistant. There is also a Bloomberg terminal at $25,000 a year and a research director to prepare Action Alerts Plus. TheStreet also agreed to give Mr. Cramer a golden parachute: His stock award vests in full if the company is acquired, and the company will pay any taxes associated with the vesting.”
Read more here.