Getty CEO Jonathan Klein received a salary increase of $50,000 last week, bringing his base compensation to $1 million. Klein's revised compensation package also includes restricted stock unit grants, valued at approximately $3.5 million, and payment of relocation expenses.
According to a statement filed by Getty senior vice president and CFO Thomas Oberdorf with the U.S. Securities and Exchange Commission, the raise compensates Klein for the elimination of various perquisites. Presumably, the latter refers to the bonus Klein did not receive when Getty Images failed to meet its 2006 revenue projections.
Klein's $3.5 million in 110,000 restricted stock units will vest 25% each year, provided Getty Images achieves future financial targets established by its compensation committee. The company will also match up to 100,000 of shares purchased by Klein himself, for a total of 175,000 matched shares over a two-year period.
Another $1 million is set aside to cover moving, housing and income-tax expenses associated with relocating Klein from Seattle to New York. Considered temporary and predicted to last for nine months, the relocation is scheduled for September. The relocation is intended to enable Klein to work more closely with Getty's media and advertising clients based in the Big Apple. However, there is much speculation that another reason for the move may be related to merger-and-acquisition activities.
Some think Klein's revised compensation package is out of line for an $1.8 billion market-cap company that was double that only six months ago. Industry insiders also question whether the move will have morale-related repercussions, particularly in light of Getty's recent cost-cutting measures, which included layoffs.