The ex-CFO of Coty has won a legal battle against the fragrance giant for stopping him to cash in his stock options for their full value.
The case, which was first brought to court in January 2009, has been concluded and Coty has been ordered to pay $5.4m to its exCFO David Fishoff.
Fishoff’s claims rest on allegations that the company wrongfully cheated him out of the money he should have received from cashing in his stock options, awarded to him as part of the Coty’s long term incentive plan.
Under the plan, Fishoff was awarded a total of 200,000 stock options that he attempted to exercise on December 1 2008.
This followed shortly after the actions of CEO Bernd Beetz who exercised 250,000 of his stock options the month previously, which Fishoff claims led to gross proceeds in the region of $10m.
At the time Fishoff requested to exercise his options, the company’s shares had been valued by J.P. Morgan in September at $58 per share; however, this value was expected to drop, he alleged in the lawsuit.
Fishoff claimed that senior executives knew that the price per share valuation of Coty’s stock for purposes of stock option would be “materially and dramatically” less than the $58 valuation made by J.P. Morgan.
On December 5, five days after Fishoff’s request to exercise his options, the share price was recalculated by Rothschild to be $31 and the company informed the CFO that his request would be processed at a later time.
Fishoff was dismissed as Coty’s CFO on December 11 2008.
Within the lawsuit Fishoff brought five causes of action against the company including common law fraud and breaches of good faith and fair dealing.
Three of the causes of action were dismissed by the court and one withdrawn by Fishoff, with the court ruling on the final cause of action (relating to the stock options) in favor of Fishoff.
Coty was not available for comment at the time of publication.