Vince McMahon has long been the driving force behind WWE, and his presence is set to continue with a new employment agreement that includes a clause outlining his potential payout in the event of a sale. With rumors of a potential sale circulating, this clause has raised eyebrows among fans and investors alike. McMahon’s role in the company is not just limited to his potential payout, however, as he will also receive other forms of compensation and maintain control over his intellectual property rights.
The Potential Payout
One of the key elements of McMahon’s new employment agreement is a clause detailing his potential payout if WWE is sold. As the majority shareholder, McMahon stands to receive a sizable payout if the company is sold at its current share price. While the exact amount is uncertain, some estimates place it around $2.6 billion. Additionally, McMahon’s contract includes language that would guarantee him at least $11 million in compensation if WWE is sold, with additional compensation likely depending on timing and share price.
Intellectual Property Rights
In addition to his potential payout, McMahon’s new contract guarantees him the rights to his own intellectual property (IP), including his life story. This means he will be able to communicate, convey, commercialize, license or otherwise exploit his story without fear of legal action from WWE. However, WWE will also have non-exclusive rights to use McMahon’s IP. The agreement also gives WWE the rights in perpetuity to McMahon’s writing, appearances, performances and creative director work product during his tenure as executive chairman.
Other Compensation
McMahon’s new agreement also outlines other forms of compensation beyond his potential payout and IP rights. This includes an annual salary of $1.2 million and a target cash bonus of 175% of that base salary, or $2.1 million. He will also receive stock awards worth $4.3 million if the company meets performance targets. McMahon is already enrolled in WWE’s 401k plan and will receive the company’s 50% employee match, as well as personal use of the company jet for travel purposes.
Control Over Employment Agreement
One of the most notable aspects of McMahon’s agreement is the degree of control he has over his own employment terms. For example, if he leaves the company within two years of a change in control (i.e. a sale), he will be entitled to a multi-million dollar payout and continuation of his benefits. Additionally, any unvested equity awards will convert into shares if such a scenario occurs. McMahon has also negotiated control over his life story and personal brand. He owns his “personal experiences, biography and life story, and all other rights of publicity and persona relating to McMahon in perpetuity.”
Speculation Surrounding McMahon’s Agreement
There is some speculation that McMahon’s employment agreement is setting the stage for major moves in the weeks to come. This could include a potential sale of WWE or a new round of media rights deals. As controlling shareholder, McMahon has always had significant power over WWE business, but with this new agreement, he appears to be consolidating that power even further.
Conclusion
Vince McMahon has been an integral part of WWE for decades, and with this new employment agreement, he looks set to continue his role at the company for years to come. His potential payout in the event of a sale has generated speculation among fans and investors alike, but there are many other components to his agreement as well. From intellectual property rights to other forms of compensation and control over his own employment terms, it is clear that Vince McMahon remains a driving force behind WWE’s success.
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