Below is an excerpt from The Corporate Library's governance risk profile for CapitalSource, Inc. (CSE).
In lieu of annual cash bonuses and as part of his 2006 employment agreement, CapitalSource, Inc.’s CEO John K. Delaney received two options to purchase an aggregate of 7,000,000 company shares. However, as a result of his options being “so far out of the money as to cease to serve as a viable compensatory tool,” Mr. Delaney forfeited his options in March of 2009. Fortunately for Mr. Delaney, he had just received in December of 2008 a whopping grant of 2,000,000 units of restricted stock worth just over $9.2 million for his role “in leading the Company through the unprecedented challenges of the past year and a half.” Disaster averted; we should all be so lucky.
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