On Friday, Comverse Technology Inc. (Pink Sheets: CMVT) announced that president and CEO Andre Dahan will receive a bonus of $500,000 for fiscal 2008. The bonus comes on top of his salary of $1 million and a grant of 420,000 deferred stock units. Each deferred stock unit will become a share of Comverse stock after a specified period.
Comverse's board approved Dahan's bonus two weeks after approving $619,000 in bonuses for three executives.
The deferred stock units can be received in three equal parts between April 2010 and April 2012. The options are worth about $3 million at Comverse's current share price of $6.90. The granting of 100,000 of the units is contingent on the company's results for 2009.
Dahan's salary will remain unchanged in 2009. 80% of his bonus will depend on Comverse's performance in 2009 and 20% will depend on Dahan's personal performance.
Comverse's board of directors has the right to adjust Dahan's bonus by 20% up or down, depending on its evaluation of his leadership based on the criteria set by the board. If Comverse misses the stipulated the pro forma operating income target for 2009, Dahan may not receive the 80% part of the bonus based on company performance, but only the 20% part of the bonus based on his personal performance. The board also reserves the right to reevaluate the bonus arrangements, including the performance criteria.
For the sake of comparison, in 2007, Dahan received a bonus of $1.8 million and 318,000 stock options. Last year, shareholders were notified of Dahan's bonus only a month after they were notified of bonuses paid to other executives.
Comverse and its subsidiaries have not published financial reports for three years, since the disclosure of the stock options backdating scandal at the companies.
Published by Globes [online], Israel business news - www.globes-online.com - on April 26, 2009
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