A federal judge has ordered Coty Inc. to pay its former chief financial officer more than $5.4 million after a year of litigation over his attempt to cash in company stock.
Michael Fishoff sued the fragrance firm in January 2009, about a month after the company fired him as cfo. Prior to his termination, Fishoff had attempted to exercise 200,000 stock options worth about $7.6 million. Fishoff accrued the shares, which do not trade publicly, through the company’s long-term incentive plan over a six-year tenure with Coty.
In March, after his suit was filed, the company paid Fishoff $2.2 million based on its own valuation of the stock, according to court documents. On Friday, Judge Shira Scheindlin of U.S. District Court in Manhattan awarded Fishoff an additional $5.4 million, or the balance of the amount he initially sought, and added interest.
The former cfo’s complaint centered on a September 2008 appraisal by J.P. Morgan that valued Coty’s private stock at $58 a share. Fishoff said he attempted to exercise 200,000 of his options that November. According to Coty procedure, employees could only give notice of such exercises on the last day of the month. Because November ended on a Sunday in 2008, Fishoff said, he gave his notice on Dec. 1. According to the suit, the company’s board initially approved the move for November, but later deemed it a December action and declared a blackout on such exercises for the later month. The company fired Fishoff on Dec. 11.
At a court conference in December 2009, however, an attorney for Coty conceded the company had allowed other employees to exercise options in November 2008 using the $58 valuation. The judge ordered Coty to pay 9 percent interest on what she called “the outstanding option payment.”
A Coty spokesman said Monday the company does not comment on litigation.
Evan Stewart, an attorney for Fishoff, called the judgment a “total victory” for his client. Stewart said Fishoff has not worked since parting ways with Coty as per a non-compete term in his contract with the company.