The surprise resignation of VeriSign Chief Executive Stratton Sclavos in May is turning out to be neither cheap nor simple.
The Mountain View company filed documents it had delayed as it sought to untangle its history of backdating options. Included in the filings were a series of revelations:
The company agreed to pay Sclavos a severance package worth more than $25 million, including $5.5 million for a clerical mistake the company made several years ago when it erroneously deleted 300,000 stock options owed to Sclavos.
In April, the company launched an audit of business travel expenses that resulted in Sclavos returning $32,000 the company had reimbursed him for use of his private plane. That investigation is continuing.
In connection with the backdated options, the company had additional expenses of $160.3 million from 2002 to 2005 – less than the $250 million the company previously estimated.
Chief Financial Officer Dana Evan resigned Tuesday.
It was unclear what role if any these snafus played in Sclavos’ resignation. VeriSign spokeswoman Lisa Malloy noted that Sclavos resigned and the board had said at the time that both sides agreed “the company had reached a point where it could benefit from new leadership.”
The disclosures come six weeks after Sclavos’ surprising resignation in late May. At the time, the company gave little explanation for the sudden departure except to note that the company previously had cleared Sclavos and Dana of any “intentional” wrongdoing in the options matter.
The company and Sclavos just reached agreement on his severance Monday. VeriSign agreed to make two payments to Sclavos of $1.97 million over the next two years. And the company will pay him $5,000 a month for consulting services, during which time he can’t work for any competitors.
The company also accelerated the vesting on 156,000 shares of restricted stock and 679,803 options, a package worth about $14.5 million as of Thursday, when the stock closed at $32.99 a share.
But the company also is paying Sclavos an additional $5.5 million because of its error related to his stock options that it discovered during its recent internal investigations. In 1998, Sclavos held 100,000 options. Because the stock split twice, he should have had 400,000. But somewhere along the line, the company accidentally switched that number back to 100,000.
While VeriSign is now up to date on its filings, its headaches aren’t over.
The company began an internal audit of business expenses for which it had reimbursed executives. That included the $568,400 the company paid Sclavos for use of his personal plane. The company asked Sclavos to refund $32,190 of that, which he did in June.
That investigation is continuing.
Sclavos could not be reached for comment Thursday.
Contact Chris O’Brien at cobrien@mercurynews.com or (415) 298-0207.