Playboy Enterprises (NYSE: PLA) has a new head, officially, after six months of searching: Scott Flanders, till now the CEO of local newspaper and TV chain Freedom Communications, has been named the CEO officially today, after news came out in WSJ yesterday. Christie Hefner, the daughter of Playboy founder Hugh Hefner, resigned in December last year, after 20 years at the company. Prior to joining Freedom in Jan 2006, he was CEO of Columbia House, the subscription music and DVD business which was sold to a unit of Bertelsmann AG in 2005.
Flanders will starts at Playboy July 1, and has a tough challenge ahead to reposition the company storied brand, try and rescue the print magazine, reassess its brand extension into other related ventures (nightclubs), and develop more robust digital offerings than it has today. This new appointment may put to rest any imminent change of hands for the company, though his previous experience suggests he has been a good turnaround-and-exit manager; rumors of it being on the block and interested bidders have been circulating for a few months now. In an interview with WSJ, he said that he will be focused “chiefly on building shareholder value by tapping the potential of the iconic bunny-head brand,” which could really mean anything. Also, Playboy has appointed David Chemerow, SVP and CFO of Olympus Media, as nonexecutive chairman. More details in release.
Meanwhile, following some controversy over former CEO Hefner’s severance package, some numbers about Flanders’ new compensation package have come out an SEC filing. His base salary of $875K is the same that Hefner got in her role as CEO last year:
– his term is for four years, starting July 1, with 30 day termination notice for anything besides cause, subject to certain severance and other payment obligations.
– Flanders will receive an annual base salary of $875,000, which will increase by $25,000 each year, and will be eligible for a one-time performance-based bonus at the end of calendar 2009 at a target amount of 75 percent of his base salary and a maximum of 100 percent. Any such bonus will be at the discretion of the board.
– For 2010 and each subsequent year, Flanders will be eligible to participate in an incentive compensation plan at a target amount of 75 percent of his base salary and a maximum of 100 percent.
– He will also receive a one-time grant of 150,000 restricted stock units of the Company’s Class B common stock and options to purchase 1,200,000 shares of Class B common stock. The restricted stock units and stock options will both vest over a period of four years, subject to accelerated vesting in the event of a change in control. Which is likely to happen way before that…
– Flanders shall be subject to non-compete and non-solicitation provisions for the term of his employment with the company and one year thereafter.