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Sharper Image cuts ex-CEO's exit pay

January 03, 2007|From the Associated Press

Struggling specialty retailer Sharper Image Corp. chopped more than $3 million from the severance pay of recently departed Chief Executive Richard Thalheimer to offset his past windfalls from favorably priced stock options, according to documents filed with securities regulators.

The pay package, disclosed in a Securities and Exchange Commission filing late last week, includes retirement benefits of $3.9 million and a severance payment of $1.78 million -- below the $5-million minimum guaranteed to Thalheimer under a contract signed in 2002.

Thalheimer, who founded Sharper Image in 1977, stepped down as CEO in September as part of the San Francisco-based company's effort to snap out of a prolonged sales funk.

Although Sharper Image's high-tech gadgets and novelty items have been losing favor among shoppers, the eclectic merchandise apparently still appeals to Thalheimer. He will pay Sharper Image $10,000 to keep two of his office decorations: sculptures of Superman and the robot C-3PO, which starred in the "Star Wars" movies.

Without providing details, Sharper Image linked the reduction in Thalheimer's severance payment to an untold number of stock options that made it easier for him to realize hefty gains.

The price for redeeming the options was set below the market value of Sharper Image's shares at the time of the award, according to the SEC filing. That method differs from corporate America's standard compensation practices, which typically peg the exercise price of stock options to a stock's market value at the time of the grant.

A Sharper Image spokesman contacted Tuesday declined to comment on Thalheimer's package.

Thalheimer made $4.56 million by exercising a total of 183,500 options during Sharper Image's fiscal 2004 and 2005, according to company disclosures for those years.

More than 100 other companies nationwide are involved in probes into whether their top executives and other employees received favorably priced options without proper disclosure.

Sharper Image is investigating dating discrepancies in options issued after 1997. The company hasn't said whether Thalheimer's options are part of its inquiry.

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