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There seems to be a bit of confusion about the departing pay for the soon-to-be-ex CEO of Twitter Richard Costolo.
Some people are reporting that he’s getting no severance. Technically, that is correct. But it would be a mistake to infer that Costolo is walking away empty-handed.
The reason for picking July 1 as the departure date seems to be no accident. According to securities filings, another chunk of Costolo’s restricted stock units, or RSUs, appears to be eligible to vest that day (or possibly June 30). The amount: 95,405 shares, worth $3.42 million (based on the $35.84 per share closing price of Twitter’s stock on Thursday).
Still, it’s also worth noting that it appears Costolo will be walking away from 349,820 unvested shares worth $12,537,548.80 as of Thursday’s price.
Twitter did not respond to a request to confirm Costolo’s vesting schedule, or my calculations.
The proxy filing many people are citing notes that Costolo had 508,828 unvested shares valued at $18,287,530. But that was as of Dec. 31, 2014.
A footnote to Costolo’s total explains:
6.25 percent of the shares of our common stock underlying the RSUs will vest on each of January 1, 2015 and April 1, 2015, and 18.75 percent of the shares of our common stock underlying the RSUs will vest in successive equal quarterly installments, subject to continued service through each such vesting date.
That means 31,801 shares of his stock vested on Jan. 1 and April 1. And the 95,405 chunk would vest July 1 (or maybe June 30).
Compared to the overinflated severance packages some CEOs receive, letting Costolo stick around so another $3.42 million in stock vests isn’t going to prompt any big outrage. On the other hand, it’s still the kind of parting gift that most of us minions can only dream about.
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