WWE executive chairman Vince McMahon is in line for a multimillion dollar payout on top of his $2.6 billion stake — and the rights to his life story — in the event that his company gets sold.
McMahon signed a new employment agreement with the company this week, retroactive to when he returned earlier this year, and the WWE filed it with the Securities and Exchange Commission on March 30. While it’s mostly a pretty standard deal, the clause about McMahon’s potential payout in the event of a sale is notable, given that his return was precipitated in part on putting the company on the market. And a clause about McMahon’s “Life Story,” are unlike just about anything you would see at another company.
When a public company gets sold, and a senior executive gets shown the door after the sale, it’s common for them to receive a generous severance package (they are sometimes called “golden parachutes”).
Most of the time, however, those agreements don’t include the rights to make a miniseries about your life.
McMahon’s new contract runs for two years (the annual compensation package is valued at $7.6 million), with the right to be extended in one year increments after that. However, the company is on the market, and may get sold this year. WWE CEO Nick Khan told CNBC last month that McMahon is “100 percent open” to selling to a company that decides it doesn’t want to keep him around.
According to the employment agreement, McMahon would receive a $6.8 million lump cash payment in the event of a sale, plus a pro-rata payout of his incentive bonus for the year (potentially another $2.1 million). He will also see all unvested shares vest, likely delivering a $4.3 million payout if a deal closed this year.
In other words, McMahon would receive at least $11 million in the event of a sale, with additional compensation likely depending on timing and share price.
Of course, Vince McMahon is also the majority shareholder of the company, so his severance package is pocket change compared to what his equity would be worth in a sale. According to the WWE’s latest proxy filing, McMahon would receive a payout in the ballpark of $2.6 billion if the WWE sold at its current $90.60 share price (as of writing).
Earlier this month McMahon actually paid the company $17.4 million for costs it incurred related to its misconduct investigation of him, so most likely his severance payment wouldn’t even cover those costs.
But it is the section about the “McMahon Intellectual Property and Life Story” that is unusual for an employment agreement like this one. McMahon has run the WWE for decades, and has long appeared in the ring as a performer (his stage name is “Mr. McMahon”), and the agreement guarantees him (and his successors) the right to his own IP, while he gives the company the right to use his IP on a non-exclusive basis. His previous employment agreement granted the company rights to commercial works based on his life.
“The Company further acknowledges and agrees that McMahon will have the exclusive right to communicate, convey, commercialize, license, or otherwise exploit his life story … including without limitation any books (memoir, biography, autobiography, etc.), articles or essays, audio recordings, audiovisual works (documentary, biopic, scripted program, dramatization, fictionalization, etc.) (the ‘Life Story Rights’),” per the contract.
In addition, the company waives any claims “relating to confidentiality, non-disparagement, non-competition, or other restrictive covenant or affirmative undertaking binding on McMahon that results from any content, communication, or action in connection with any exercise of the Life Story Rights and any embodiments thereof.”
In other words, McMahon would have wide leeway to tell his story without fear of a lawsuit from the WWE.
While McMahon has not appeared on any WWE programming since returning in January, and while his son-in-law Paul Levesque (stage name: “Triple H”) is currently running WWE creative, McMahon’s contract leaves open the possibility that he could perform on-camera or work on the creative side of the business again, and gives the company full right to those works.
The contract gives the company the rights in perpetuity to “McMahon’s writing, appearances, performances, and creative director work product, the Events, and the Footage… (including without limitation all storylines, incidents, dialogue, characters, actions, routines, ideas, gags, costumes or parts of costumes, accessories, crowns, Inventions (as defined below), championship, title or other belts (if applicable), and any other tangible or intangible materials written, composed, submitted, added, improvised, or created by or for McMahon in connection with his appearance at the Events and/or in the Footage),” during his tenure as executive chairman.
