(Reuters) - Life and mortgage insurer Genworth Financial Inc (GNW.N) will pay former Chief Executive Michael Fraizer a lump sum of $2.25 million as part of a separation agreement reached on Monday.
Fraizer, who had held the top post at the company since it was spun off from General Electric Co (GE.N) in 2004, stepped down as CEO after the company’s weaker-than-expected results earlier this month.
The company also said in a regulatory filing that 400,000 of Fraizer’s previously vested and outstanding stock appreciation rights (SARs), with a base price of $2.46, and 433,334 SARs with a base price of $7.80, will be exercisable until June 29, 2013.
Investors have often been critical of the company for not doing enough to boost its share value, with hedge fund maven Steve Eisman even threatening a proxy war.
Analysts have said the change of guard would bolster investor confidence in regaining capital levels and that the company’s U.S. mortgage insurance unit’s improving results will help the stock.
Genworth has faced mounting losses at its Australian mortgage insurance unit, part of which it intends to float in an initial public offering.
The company has pushed back the date of the listing to early 2013 due to unfavorable market conditions.
The Australian unit’s listing would have freed up capital, which shareholders were hoping Genworth would use to buy back shares.
Fraizer, who’s employment with the company will end on June 29, was replaced by Chief Financial Officer Martin Klein, who is acting as CEO till a replacement is found.
Shares of the company were down about 2 percent at $5.72 on Monday on the New York Stock Exchange.
Reporting by Aman Shah in Bangalore; Editing by Joyjeet Das