What Happened? Office Depot Announces Resignation Of Top Executive.

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What Happened? Office Depot Announces Resignation Of Top Executive.

 news 2017-10-23 at 12:27:12 pm Views: 712
  • #49349

    What Happened? Office Depot Announces Shock Resignation Of Top Executive.
    By Keith Larsen  –  Reporter, South Florida Business Journal.

    Image result for Office Depot Michael Allison

    Office Depot Inc.'s Chief Administrative Officer Michael Allison resigned from the company late last week and will be taking home a severance package totaling about $2.5 million.

    The Boca Raton-based office supply company (Nasadaq: ODP) announced the departure of Allison in a filing with the Securities and Exchange Commission on Tuesday, but did not mention the reason he is stepping down. An spokeswoman for Office Depot declined comment.

    The resignation of Allison comes just two weeks after Office Depot announced that it would be acquiring CompuCom Systems, Inc. for $1 billion as it looks to diversify away from office supplies and into technology services.

    CompuCom is headquartered in Plano, Texas, and provides IT support services which includes helping companies solve hardware and software problems.

    Allison was named executive vice president and chief administrative officer for Office Depot in March, according to the company's website. He was responsible for the company's human resources functions, communications, events, IT, loss prevention, real estate, construction and aviation.

    He joined Office Depot in 2006 as vice president of human resources and prior tohis tenure at Office Depot, Allison served as executive vice president of human resources for Victoria’s Secret Direct.

    Allison's severance package includes: $900,000 in payments from his salary, $346,875 from his 2017 annual incentive plan and a lump sum payment of $1.3 million that will be paid out six months from his resignation.

    Office Depot has struggled in recent years to compete with Amazon and e-commerce companies on its core office supply products.

    Investors also don't appear too confident that its latest $1 billion acquisition will solve these issues.

    Since the company purchased CompuCom, Office Depot's stock has fallen nearly 19 percent to $3.72.

    Office Depot acquired CompuCom from the private equity firm Thomas H. Lee Partners, L.P., and said it would finance the deal through new debt along with issuing approximately 45 million shares of its common stock. Additionally, Office Depot expects to refinance CompuCom’s existing debt with a new term loan of approximately $750 million.

    The acquisition will increase Office Depot's total debt from $285 million to $1 billion. The amount of debt the company is taking on, as well as the shares it is issuing, may be worrying investors since the acquisition is worth about half of the company's nearly $2 billion market capitalization.

    Image result for Office Depot Michael Allison