Martha Stewart Living: Executive Chairman's Employment Pact Changed to End Early
The change to the employment agreement of Charles Koppelman comes after the recent hiring of Lisa Gersh as president and COO and as founder Martha Stewart is set to return to the company’s board this quarter.
NEW YORK – Martha Stewart Living Omnimedia said in a regulatory filing on Friday that the current employment agreement of executive chairman Charles Koppelman has been changed so that it will expire at the end of this year at the latest. The expiration date of his employment term was previously the end of 2012.
Koppelman is expected to then serve on the board with a different title.
“As modified, the agreement will end on the earlier of Dec. 31, 2011 or the date on which the president and COO of the company will begin to report directly to the board,” the filing said. Former NBCUniversal top executive Lisa Gersh recently joined MSLO as president and COO. She has been reporting to Koppelman, but the company said she will end up reporting directly to the board by next year.
The news of the change to Koppelman's employment pact also comes after the company recently said that founder Martha Stewart would return to the board this quarter after the end next month of a five-year period that was part of her settlement over insider trading charges. Some on Wall Street believe she could take the chairman role after Koppelman's tenure ends.
Stewart spent five months in prison after being convicted of lying to investigators about a 2001 sale of Imclone shares. A settlement for a related civil case with the SEC from Aug. 2006 barred her from serving as a board member or officer in a public company for five years.
Asked about rumors that he had some friction with Stewart that could lead to his departure, Koppelman told the New York Post earlier this year: "Not true. I have a contract for another two years."
MSLO said Friday that it also entered a services agreement that provides for Koppelman’s “continued service as a director of the company following the end of his employment and for his renomination as a director in connection with the 2012 annual meeting.” As long as he remains a director, Koppelman will have the title of non-executive chairman, vice chairman or special committee chairman, the filing said.
MSLO didn’t say in the filing though who could replace Koppelman as executive chairman, if Stewart could do so and if such an appointment was planned any time soon. A spokeswoman had no additional comment. Morgan Joseph analyst David Kestenbaum said it "surely seems like Martha will ultimately become chairman, and Charles will [be] a member of the board."
Koppelman will be entitled to a severance payment of $1.47 million, and the company is obligated to pay his legal expenses in connection with the modification of his employment deal up to $35,000, according to the filing.