NEW YORK (TheStreet) -- Casablanca Capital unseated the board of Cliffs Natural Resources (CLF), but the company will still grant stock awards to Cliffs' outgoing directors and many top executives. As Casablanca's nominees were elected to take control of Cliffs' board, the last move of the outgoing board was to authorize a compensation plan that would reward them with millions of dollars' worth of stock grants.
It is perhaps ironic that shareholders, who suffered from the over 80% decline in Cliffs' stock over the past six years, allowed for a last payout to the company's outgoing directors and executives.
Shareholders backed a six-director slate run by Casablanca at Cliffs' July 29 annual shareholder meeting, meaning the fund's nominees would take control of the struggling mining company's board. But results from the vote also show that a majority of Cliffs shareholders backed a large pay package for the board and executive team they had voted to replace.
About 56% of shareholders voted for Cliffs' 2014 director, executive and employee compensation plan, allowing for a near-doubling in Cliffs' total stock awards to 11 million shares. Cliffs' compensation plan for directors included the authorization of 300,000 shares for non-employee directors and retention RSU's for top executives.
As results of the shareholder vote filtered in on July 29, the last move of Cliffs' outgoing board was to authorize stock grants and pay packages, which also came with an amendment to change-in-control features that allowed for an accelerated vesting in the event that a director or employee was fired.