Todd Bradley's departure from
will result in a windfall for the outgoing CEO -- and an earnings hit for shareholders.
palmOne will give Bradley a severance check for somewhere between $2.4 million and $2.8 million, according to a regulatory document filed on Thursday. Additionally, the company will accelerate the vesting of all of Bradley's restricted stock and an undisclosed portion of his outstanding options when he leaves the company on June 3.
The company plans to take a $3.2 million charge related to the severance package in its fiscal third quarter. That charge works out to be about 7 cents a share, at the company's current share count.
The charge will weigh on what the company already warned would be a disappointing quarter. Due to seasonality and delays in signing key partners for its Treo smartphones, palmOne
warned last month that its third-quarter earnings and revenue would come in far below analysts' estimates.
Since that warning, palmOne's shares have lost 40% of their value. That plunge includes a further drop on Thursday, when the company's stock closed regular trading off $1.06, or 4%, to $25.39.
announced Bradley's resignation on Monday. Bradley will officially step down at the end of the company's quarter on Feb. 25 and will be replaced on an interim basis by Ed Colligan, currently palmOne's president. Bradley will stay with the company as a consultant until June 3.
CEO of palmOne since the company's merger with
in 2003, Bradley earned $1.5 million in bonus and salary last year and another $514,433 in restricted stock.
Bradley's stock and options holdings could turn out to be another boon for him. As of July, he held some 403,688 options, of which some 215,052 had an average exercise price of $11.20 a share, according to regulatory filings. The company awarded him another 150,000 options in October, according to the filings, but did not disclose the exercise price of those shares. At the time of that grant, the company's stock was trading at about $30 a share.
As of last month, Bradley held at least another 31,760 shares of restricted stock.
As part of his severance package, Bradley signed non-competition and non-solicitation agreements, according to the company. However, palmOne did not disclose the duration of those agreements.