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Your welcome guys! I tend to ask a lot of noob questions, so I figured this is one way to give back to the board.
Anyhow, AZWhobass asked about Larry Thomas's pay package. The Fender S-1 does discuss his pay package, and the other four top officers. (It's required by SEC), and board of directors. The board of directors each get about $45,000 in salary, and a total package worth between $150,000- $170,000. For board of directors, that is about right for a company of Fender's size. (Bigger companies are at $250,000 total for directors).
As for Mr. Thomas, his compensation package was worth about $5,700,000 in 2011. There are two things that caught my attention about his pay package.
1) His pay package was way, way more than any of the other named officers. Their CFO made about $2,000,000, and the next person down made $860,000. This seems a bit weird. There is typically not such a huge drop off between the CEO and other officers in pay. There is usually a big difference, but not this skewed.
2) Larry Thomas got around $250, 000 in perks, about half of that is what called a tax gross-up, which means the company paid for his taxes that he incurred in receiving those perks, and probably other things as well. Hard to know exactly from this form.
3) I thougth the next paragraph was very interesting, I will just cut and paste, and leave you all to decide the implications.
As part of his 2011 amended and restated employment agreement, additional changes were made for the period beginning January 1, 2012, including the elimination of certain travel and commuting perquisites, and clarification regarding coordination of retiree medical care with Medicare. His 2011 amended and restated employment agreement also eliminated the excise tax gross-up provision under his original agreement, which would have grossed Mr. Thomas up for any excise taxes under Section 4999 of the Code in connection with severance and other benefits received that are contingent upon a change of control of the company. The amended agreement instead applies a modified provision, which provides Mr. Thomas with the greater of (i) the after-tax benefit assuming his change in control severance and other benefits are cut back to the amount that would not subject him to an excise tax under Section 4999 of the Code or (ii) the after-tax benefit (after taking into account the excise tax that the executive would have to pay), assuming no cutback was applied (this provision is referred to as a “Modified Cap”).
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