Instructure CEO Could Raise More Than $ 22 Million After Company Sale

IBL News | new York

Five senior executives from Instructure Inc (NYSE: INST), a leading learning firm about to be taken over by investment firm Thoma Bravo, could receive ‘golden parachute compensation’ of over $ 25 million, following a “change of control” of the company, according to a statement filed with the SEC on Jan. 2.

CEO Daniel T. Goldsmith (Dan Goldsmith) would earn over $ 22 million ($ 473,000 in cash, $ 22 million in equity, and $ 20,000 in perquisites / benefits), assuming Instructure’s transaction occurs on February 13, 2020.

The second most important compensation would be for the CFO Steven B. Kaminsky, a total of $ 9.4 million. Matthew A. Kaminer, senior vice president and general counsel, would raise $ 8.6 million; Marta DeBellis, director of marketing, $ 3.3 million; and Frank Maylett, EVP sales at Instructure, $ 1.08.

These payments are automatically activated upon “Termination at” or after the “Change of control”, as these executives are entitled to additional remuneration or benefits. The amounts, shown in the table below, do not include any payouts or perks that would have been earned with the stock awards – including casting bonuses for 2018 – before the $ 2 billion cash sale to Thoma Bravo – may the whole board urged shareholders in December to approve.

Documents filed by the company with the SEC assume that the merger with Thoma Bravo will take place on February 13, 2020.

Another investor opposes the takeover of Thoma Bravo

On the other hand, a fourth Instructure shareholder, Lateef Investment Management LP, spoke out against Thoma Bravo’s takeover, arguing that the educational software company is selling for a low price after performing a flawed sales process, Bloomberg reported.

Lateef Investment Management LP, which owns around 1.5% of Instructure, pointed out that the company is worth at least $ 60 per share.

Quoc Tran, Chief Investment Officer at Lateef Investment Management LP, said: “Goldsmith remaining CEO seems like a conflict of interest where he puts his own interests ahead of those of shareholders.“We don’t think Dan has done a good job with Bridge and this deal rewards him rather than holding him accountable.”

Respond to criticism from others three main shareholders – Praesidium Investment Management (7.5%), Rivulet Capital (5%) and Obendorf Enterprises (6%) -, Instructure said two weeks ago that the investment company Thomas bravo offered the highest price, $ 2 billion on a transaction of $ 47.60 per share.

The firm added that its review process took 11 months with 19 parts sign non-disclosure agreements.

The deal has a so-called go-shop period during which it can solicit further offers until tomorrow Wednesday.

Related story:
Bloomberg, December 31: Instructure set up a $ 25 million stock payment for bosses in the middle of the sale

About Marjorie C. Hudson

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