Geller’s exit package limits when he can bid for company
BY DAVID ROEDER Business Reporter November 7, 2012 5:54PM
COMMERCIAL IMAGE - In this photograph taken by AP Images for Michael Jordan's Steak House, Laurence Geller, president and CEO of Strategic Hotels and Resorts, and Michael Jordan, mark the official opening of Michael Jordan's Steak House Chicago with a ribbon cutting at the grand opening celebration, in Chicago, Thursday, Sept. 22, 2011. The new restaurant is located in the InterContinental Chicago, a Strategic Hotels and Resorts property. (Peter Barreras/AP Images for Michael Jordans Steak House)
Updated: December 9, 2012 7:42PM
Strategic Hotels & Resorts Inc., the Chicago-based company that replaced its chief executive last week, Wednesday reported a narrower loss for its third quarter.
The owner of 18 hotels and resorts also reported to regulators its separation agreement with the former executive, Laurence Geller. The company abruptly replaced him with Raymond “Rip” Gellein Jr., who added executive duties to his role as chairman.
Under Strategic’s contract with Geller, he cannot make a bid for all or parts of the company for 18 months. The contract, filed with the Securities and Exchange Commission, does not bar Geller from working for a competitor, but it prevents him from hiring Strategic executives for at least a year.
Geller will get a severance payment of $1.05 million and be eligible for stock option grants depending on the company’s performance.
For the third quarter ending Sept. 30, Strategic said it lost $8.6 million, 5 cents a share, vs. an $11.9 million loss, 6 cents a share, in the same quarter last year. Revenue rose 8 percent to $204.6 million.
The earnings were announced after Wednesday’s trading. Strategic’s shares were down 16 cents, 2.5 percent, to $6.13.
Geller, 64, founded the company in 1997. His stated reason for leaving, issued through the company, was to do something else with his life. He cited the upcoming publication of his second novel as an important event.
Analysts have speculated that his departure could have to do with a sale of the company. Strategic invests in high-end properties, whose results have suffered during the worldwide recession and its aftermath.
In the Chicago area, Strategic owns the InterContinental Chicago and Fairmont Chicago, plus the Marriott Lincolnshire Resort.