HomeGrill ManufacturersWeber to Spend Millions in Severance Pay for Ousted Executives

Weber to Spend Millions in Severance Pay for Ousted Executives

Grill maker Weber (NYSE: WEBR) is looking to right the ship after disappointing financial results by turning over their executive team. Unfortunately, doing that isn’t cheap, which adds to Weber’s cash problems as they’re rumored to be taking on more debt.

Below is information compiled from Weber’s SEC filings to estimate potential payments for termination without cause. It reflects the executives being paid a target bonus for the year that they were terminated.

NameSalary PayoutBonus PayoutTotal
Chris M. Scherzinger$1,490,000$745,000$2,235,000
Troy J. Shay$729,240$475,860$1,205,100
Mary A. Sagripanti$400,000$300,000$7,00,000
Total$2,619,240$1,520,860$4,140,100
Terminated Weber Executive’s Estimated Severance Payout

Details on the estimated severance payouts

  • Former CEO Chris Scherzinger receives 24 months of salary continuation and his target bonus equal to his salary
  • Former Chief Growth Officer Troy Shay receives 18 months of salary continuation in accordance with a Severance Agreement approved by the Board of Directors on October 6th, 2022. His employment agreement originally provided for 12 months.
  • Former CMO Mary Sagripanti receives 12 months of salary continuation and her target bonus
  • The departed executives also receive 12 months of continued health benefits, which isn’t included above
  • Chris Scherzinger and Troy Shay also had stock awards with Weber, but it’s unknown if they were vested upon termination and aren’t reflected above

Leverage Problems at Weber

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As noted previously by Citi analyst Chasen Bender when he cut his rating on Weber to Sell, they have a really high leverage ratio. It’s so high, that he noted it’s the most levered company in Citi’s coverage group.

Net leverage ratio measures net debt divided by EBITDA (earnings before interest, taxes, depreciation and amortization). Weber was at 26 times debt to EBITDA in their last reported quarter, which deteriorated significantly from 2.9 times in the fourth quarter of 2021.

As Weber is possibly raising more debt and we’re heading into winter, a slower selling season, their net leverage ratio likely will worsen even more. Paying millions of dollars to former employees only piles on to their cash problems.

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SourceSEC
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