WWE Executive Chairman Vince McMahon’s New Compensation Agreement and Control Over the Company

WWE executive chairman Vince McMahon recently signed a new employment agreement with WWE, which includes a potential payout and control over his life story rights in the event of WWE selling the company. McMahon’s return earlier this year was partly due to the idea of putting the company on the market, and his new contract runs for two years with the right to be extended in one-year increments after that.

Potential Payout for McMahon in the Event Of a Sale

McMahon is the majority shareholder of WWE and would receive a payout of around $2.6 billion if the company sold at its current $90.60 share price. The agreement guarantees McMahon the right to his own intellectual property and life story rights while giving the company the right to use his IP on a nonexclusive basis.

According to reports, McMahon would receive at least $11 million in the event of a sale, with additional compensation likely depending on timing and share price. The contract gives the company rights in perpetuity to McMahon’s writing, appearances, performances, and creative director work product during his tenure as executive chairman.

McMahon’s New Compensation Agreement

Under McMahon’s new employment agreement, he will be paid up to $7.6 million this year, including a base salary of $1.2 million, a target cash bonus of 175% of his base salary, and stock awards of $4.3 million. Additionally, he owns controlling equity in WWE, and his total shareholdings are worth $2.6 billion.

The filing also includes a multimillion-dollar payout for McMahon if he leaves the company within two years of a sale, including twice his base salary and annual cash bonus. Moreover, Vince is enrolled in WWE’s 401k plan and receives 50% employee match.

Control Over His Branding

McMahon negotiated control over his life story and personal brand, including distinguishing characteristics and variations of his name, including the Mr. McMahon character in WWE storylines. The company waives any claims relating to confidentiality, nondisparagement, non-competition, or other restrictive covenant or affirmative undertaking binding on McMahon in connection with any exercise of his life story rights and any embodiments thereof.

McMahon’s Involvement In Creative Direction

McMahon’s return is significant, as he is positioned as a Board of Directors-level move with voting power to dictate WWE business. He is now getting more involved with day-to-day operations and creative direction for WWE programming.

In the past, McMahon has been known for his hands-on approach to the creative process for WWE shows like Raw and Smackdown. Under his new employment agreement, he will have exclusive rights to communicate, convey, commercialize, license or otherwise exploit his life story.

Khan Amendment

The filing also includes the “Khan Amendment,” which is a raise for CEO Nick Khan. WWE CEO Nick Khan said McMahon is “100 percent open” to selling to a company that decides it doesn’t want to keep him around.

In conclusion, Vince McMahon’s new employment agreement with WWE guarantees him control over his own intellectual property and life story rights while giving the company nonexclusive use of his IP. The agreement also gives him a potential payout if WWE sells at its current share price, in addition to base salary, target cash bonus, and stock awards. Furthermore, McMahon negotiated control over his branding while getting actively involved in day-to-day operations and creative direction for WWE programming as an executive chairman.

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