Under CEO Mark Lucas at Imation Corp., the Oakdale technology and data storage company, yearly sales declines were as predictable as humidity in late July. Most recently, the firm reported a 13 percent dip in first-quarter revenue when compared to 2014.
Since Lucas was named CEO in early 2010, Imation stock is down by 70 percent. The company spent $174 million in four acquisitions while losing almost $650 million.
But in modern corporate America, a CEO’s paycheck is largely immune to the tides of failure. After Imation experienced a double-digit slide in revenue last year, the company doubled Lucas’ pay to almost $5 million.
Yet Imation's epic underperformance made Minnesota's 35th largest public company takeover fodder for hostile investors. The New York-based Clinton Group bought enough Imation stock to execute a coup within the company's six-member board. At the company's annual shareholder meeting earlier this year, Clinton elected a trio of hand-picked directors.
Lucas, along with two others, was ousted.
But give Lucas credit for forethought. Last November he negotiated a severance package. When he walks away no later than September, the bruised exec will pocket $4.8 million.
Getting paid for sucking in corporate America is hardly unique to Imation. While execs cry that a $15 minimum wage will be the end of capitalism as we know it, the personalized cufflink set has a sturdy sense of entitlement when it comes to their own paychecks, whether they’ve earned them or not.
In 2012 McDonald’s more than tripled the pay of CEO Don Thompson, jacking it up from $4 million to almost $14 million. This after the company reported declining sales for the first time in a decade.
Staples Inc. has experienced three straight years of falling sales, and more than 200 stores are slated to close this year. Still, chief exec Ronald Sergent’s compensation has nearly doubled to $12.4 million over that period.
It seems that when the mighty fail, the only hardship they endure is mustering a bigger smile when they read their bank statements.
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