Westlake-based Solera Holdings granted Chief Executive Officer Tony Aquila a $7 million special stock award to make sure he stays at the company, reversing a plan to hold off on giving him more equity until 2016.
The board approved 127,464 restricted stock units for Aquila on March 9 after a slump in the company’s shares left a previous option grant underwater, the maker of automobile claims processing software said in a regulatory filing last week. Half of the units vest immediately, and the other half pays out in March 2018.
For the past six months, Solera’s shares have closed below $58.33, the exercise price of an options grant given to Aquila in 2013, valued at $23.3 million at that time. The company had said it wouldn’t grant him more equity until the quarter ended June 2016 “in recognition of the amount and purpose” of the award, according to its 2013 proxy filing.
Seventy percent of the options are dependent on achieving certain profit and total return goals through 2020, while the remaining component is tied to Aquila’s continued employment through 2017. He will still be able to earn and exercise options if he meets the targets, Jason Brady, the company’s general counsel, said by phone.
“It’s fairly atypical to go ahead and grant an additional long-term award so close after a mega-grant,” said Joe Kager, managing consultant at the compensation consultant POE Group. “It’s highly atypical for a sitting CEO who’s been in a role so long to have half of a restricted stock grant vest immediately.”
Aquila founded Solera in 2005 and sold shares in an initial public offering two years later. The stock that vests immediately is meant to reward Aquila in part for his work on Solera’s risk and asset management application, the filing said.
“Nobody has blinders on,” Brady said. “Circumstances have changed, and the committee, acting in the best interest of the company and the stockholders, decided to make this award at this time.”
Solera shares, which have tumbled more than 20 percent in the past 12 months, rose 89 cents to $51.30 in afternoon trading Monday. The dollar’s rally against the euro and the British pound has weighed on the company’s overseas revenue, and some investors have been unhappy with its increasing long-term debt load, said Gary Prestopino, managing director at Barrington Research Associates in Chicago.