Vince McMahon, the Executive Chairman and controlling shareholder of World Wrestling Entertainment (WWE), has signed a new employment agreement that makes him eligible for a multi-million dollar payout and life story rights if the company gets sold. The new contract also comes with an opportunity for the billionaire CEO to earn up to $7.6 million this year.
Under the terms of the new agreement, which took effect on March 31st, 2023, McMahon’s compensation consists of a base salary of $1.2 million, a target cash bonus of 175% of his base salary ($2.1 million), and stock awards of $4.3 million if the company meets performance targets. In addition to his salary and equity payments, McMahon is enrolled in WWE’s 401k plan and gets to use the company jet for personal travel.
However, what makes this contract stand out is McMahon’s potential payout in the event of a sale, as well as a clause about his “life story” unlike anything seen at another company. If WWE is sold at its current share price, McMahon would receive a payout of $2.6 billion due to his majority ownership stake in the company.
Furthermore, McMahon would receive a $6.8 million lump sum payment in cash when WWE is sold along with prorata payment of his incentive bonus for the year. All unvested shares would vest, likely delivering a $4.3 million payout if a deal closed this year. In total, McMahon would receive at least $11 million in the event of a sale, with additional compensation likely depending on timing and share price.
Perhaps what’s more unique about McMahon’s employment agreement is the clause relating to his life story. The contract gives McMahon the exclusive right to communicate, convey, commercialize, license, or otherwise exploit his life story. The company waives any claims “relating to confidentiality, nondisparagement, non-competition, or other restrictive covenant or affirmative undertaking binding on McMahon that results from any content, communication, or action in connection with any exercise of the Life Story Rights and any embodiments thereof.”
This clause allows McMahon to perform on-camera or work on the creative side of the business again if he chooses to do so. Moreover, the WWE would have full rights to those works in perpetuity during his tenure as Executive Chairman.
After a scandal-induced retirement that lasted six months, Vince McMahon has returned to more active involvement in day-to-day operations of WWE. As the controlling shareholder of WWE with 28.7 million total shareholdings worth $2.6 billion, McMahon has always had the voting power to dictate the business.
McMahon is currently focused on big picture projects such as a potential sale of the business and the next round of media rights deals. According to CEO Nick Khan, McMahon is the only person who actually runs WWE and everyone else helps him with the operation.
In summary, Vince McMahon’s new employment agreement with WWE affords him a unique level of control over his life story and personal brand while also entitling him to a multi-million dollar payout if WWE is sold. As Executive Chairman of the Board for at least two more years under this new contract, McMahon is set to earn up to $7.6 million this year alone from his base salary plus bonuses and stock awards tied to performance targets.
Image Source: Wikimedia Commons
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