US Courts Open - and Close - Messier’s Golden Parachute

17 September 2003

New York State Supreme Court Justice Marilyn Shafer on Monday struck a blow for the little man against a giant multinational corporation.

Her ruling in a Manhattan court voted with both hands in favor of humble French artisan Jean-Marie Messier, who once upon a time labored long and selflessly as chairman/ceo to enrich the ingrate shareholders of Franco-American media and entertainment conglomerate Vivendi Universal.

Not that this simple ouvrier went unrewarded for his pains. Echoing St Luke (‘the labourer is worthy of his hire’), his final year with Vivendi brought him a pittance of €5.6 million ($6.30m; £3.94m) – meager reward for steering the group last summer to the brink of bankruptcy.

Fortunately Vivendi's parsimony toward this loyal toiler was ameliorated by provision of a cosy Manhattan apartment and an array of perks that would maintain a Rwandan village for several lifetimes.

In a last-ditch effort to reassure shareholders and creditors, Messier was forcibly ousted last summer from his dual role and refused all severance payments. There has since been an extended probe into his management practices both by the Commission des Opérations de Bourse (the French stock market authority) and US regulatory bodies.

His ousting without a million bucks to call his own earned Messier Judge Shafer’s compassion, backed by an order to Vivendi Universal to pay him $23.5 million, part of a controversial and disputed ‘golden parachute’ compensation package.

Vivendi claims that the payoff deal was granted without board authorization by its [then] chief operating officer, Eric Licoys. It is vehemently opposed by the group which seeks damages both from Messier and Licoys – as a result of which the payout was frozen last month by a French court [WAMN: 21-Aug-03].

This poses a neat dilemma. As a multinational headquartered in France and active in the US, Vivendi falls under the legal jurisdiction of both nations. If it obeys one court, it disobeys the other.

The solution, if there is one, should keep the meters of several teams of lawyers ticking happily away for months.

• Late-breaking News ...

The Securities and Exchange Commission on Tuesday requested a federal court to suspend any payments to Messier for the next 45 to 90 days.

It cited the Sarbanes-Oxley Act, which authorizes the commission to seek a temporary asset freeze while investigating possible securities-law violations.

The SEC asked the court to order Vivendi to place in escrow the $23 million that Judge Shafer ordered the company to pay Messier. The cash may constitute "ill-gotten gains", according to the agency.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff