The $74 Million Stock Award That Jarden’s Board Values at Zero - Bloomberg Business

The $74 Million Stock Award That Jarden’s Board Values at Zero - Bloomberg Business: "Jarden Corp.’s Executive Chairman Martin Franklin is poised to become one of the highest-paid U.S. executives for 2014 thanks to a $74 million performance award that the consumer-brands company granted him last year and recorded as having no value.
The grant includes 1.8 million restricted shares that are deemed “improbable” to vest in full because the underlying performance criteria -- annual net sales of $10.5 billion and adjusted earnings-per-share of $4 by Dec. 31, 2018 -- are unlikely to be achieved, the board’s compensation committee wrote in a March 30 preliminary proxy filing.
The shares, worth $73.9 million on the day they were granted, are listed with Franklin’s other equity awards in the summary compensation table with no value. In a footnote, Jarden cites a Financial Accounting Standards Board rule that advises companies to value performance-based equity grants based on the probability that the targets will be met.
“This grant-approach appears to allow a company to skirt the summary compensation table disclosure,” Ron Bottano, a vice president at compensation consultant Farient Advisors LLC, said in an e-mail. “It does not strike me as best practice.”
Jarden, based in Boca Raton, Florida, declined to comment on specific questions about its treatment of the grant.
The company, which owns a collection of brands including Yankee Candle, Rawlings baseball gear and Bicycle playing cards, granted Franklin a similar award in 2010 that it also deemed improbable to vest due to its performance criteria, according to filings. It vested in full when the target was met in 2013.
‘Aspirational Targets’
The award was paid out last year and allowed Franklin to take home 2.25 million shares valued at $120 million as of Monday’s close in New York."



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