The news that Lazard CEO Bruce Wasserstein’s estate will vest in approximately $188 million worth of restricted stock units catapults Mr. Wasserstein into the category of “most bejeweled golden coffin” recipients.
Except that this doesn’t include the almost $700 million of Lazard shares that Mr. Wasserstein and the Wasserstein family already control.
We can’t argue with the $700 million. These have been “earned” – though given the fact that he was awarded $132 million worth of restricted stock units during the single year 2008, the difficulty with which this level of income was earned begins to be questionable.
But the $188 million?
These were restricted stock units, largely made up of regular and special retention awards, as all restricted stock units are, even when initially predicated on performance, otherwise, why restrict them…?
The question is: why would such awards contain a death-vesting condition? The idea that such a grant of RSUs could be effective in the afterlife is simply ridiculous and the awards should have been structured so that they would lapse on any termination – since they would no longer be functioning as a retention device – regardless of the cause of the termination.
That would be not only an effective use of shareholder resources, but a sensible one.
Paul Hodgson — Senior Research Associate
