When you read the SEC filings as regularly as I do, you come across all sorts of crazy names that companies use to describe various payments to top executives. But last week, I stumbled across a new one: a death retention bonus. Retention bonuses, which have become increasingly popular, are theoretically used to keep an executive in his or her job once the company is acquired or a new management team comes on board. The key to the bonus is that the employee is usually required to continue showing up for work in order to collect. But that’s a bit difficult to do when someone is, say, six feet underground. Still, that didn’t stop Furniture Brands International (FBN) , manufacturers of such furniture brand names as Broyhill and Thomasville, from taking a creative spin on deferred compensation by creating what it calls a “death retention bonus” for its top three employees. In a recent 8-K, the company noted that it had agreed to provide such bonuses to President John Foy, senior vice president Lynn Chipperfield and Broyhill president and CEO Dennis Burgette. Though the filing makes note of a dollar amount in Schedule A, the schedule was not included in the recent filing, so it’s hard to figure out how much death is worth to the three execs. But there’s no faking death just to collect. Under the terms of the agreement, beneficiaries must present proof of death in order to collect their money.
(via Michelle Leder’s Footnoted.org)