New Oakley CEO Receives $250,000 ‘Signing Bonus’ on Top of $350,000 Salary

Sunglass maker Oakley Inc.’s new chief executive will get a base salary of at least $350,000 and a “signing bonus” of $250,000, according to documents filed Friday with the Securities and Exchange Commission.

William D. Schmidt, who today succeeds Link Newcomb as chief executive of the Foothill Ranch-based company, also is entitled to a bonus equal to 60% of his base salary if the company meets certain performance targets.

Further, he was granted options to purchase 500,000 shares of stock with an exercise price equal to $7.63, vesting in four equal annual installments. Oakley’s stock closed unchanged Friday at $6.88 in New York Stock Exchange trading.

In addition, Schmidt will be entitled to 300,000 additional stock options as Oakley’s market value hits key benchmarks. He also will be reimbursed for some relocation expenses and provided with a leased automobile.

The company announced the executive change last week. Oakley said it hired Schmidt, a former Gatorade executive with extensive marketing experience, to take Oakley to “the next level.” Newcomb remains on the board and becomes chief operating officer.

Newcomb’s new employment agreement gives him a base salary of at least $350,000 a year and an annual bonus of at least $200,000.

In 1998, Newcomb took home $553,030, a 79% jump over 1997. His base salary rose 14% to $350,000, and he collected a $200,000 bonus. He did not receive a bonus in 1997. He also received matching funds from the company for his 401(k) plan and other benefits worth $3,030.

Newcomb holds options on 267,435 shares worth $2.54 million at the end of the fiscal year.

Board member Michael Jordan, whose endorsement contract pays an annual retainer of $500,000, was also awarded options to buy 40,000 shares of stock at an exercise price of $11.62 per share, the fair market value on the date of the grant. That award was made because Jordan’s likeness was used on the product packaging for a new style of Oakley sunglasses.

The company also increased its compensation package for board members not employed by Oakley. In addition to their previous annual retainer fee of $25,000, they will get $1,000 for each committee meeting attended, $5,000 annually for each committee chaired, $2,000 per day for each special board meeting and a yearly grant to buy 10,000 shares with an exercise price equal to the fair market value on the date of the grant, vesting on the anniversary of the grant.

Chairman and President Jim Jannard did not collect a salary or bonus in 1998, for the second consecutive year. He chose not to take a base salary and was not entitled to an annual bonus.

None of the company’s executive officers was granted stock options in 1998.