Oct. 1 (Bloomberg) -- Billionaire Carl Icahn, faced with two executive departures, locked up a third officer with a $6.5 million salary and the threat of having to repay $600,000 should he hold talks with a rival hedge fund or try to start one.
Vincent Intrieri, who has worked for Icahn since 1998, will oversee the financier’s operating companies and help manage his investments, according to a copy of the employment contract filed yesterday with the U.S. Securities and Exchange Commission. He provided similar services under a previous agreement with Icahn’s New York-based holding company, Icahn Enterprises LP, that was set to expire at the end of this year.
A former distressed-debt specialist at Elliott Associates LP, the New York hedge fund run by Paul Singer, Intrieri was one of at least three Icahn executives who participated in the fees and profits generated by the financier’s hedge fund. One of those officers left last year to start his own hedge fund and another is considering doing so, prompting Icahn to seek ways to keep a tighter hold on talent.
“I can’t stand in their way,” Icahn, 75, said yesterday in a telephone interview. “But I want to know the employee is not going to spend half his time thinking about how he can start his own hedge fund.”
Keith Meister, who was vice chairman and principal executive officer, departed in August 2010 to start Corvex Management LP, a hedge fund that raised $250 million from a single investor, identified by the New York Times as billionaire George Soros. Alex Denner, a former Morgan Stanley portfolio manager who joined Icahn in 2006 to invest in health-care companies, may leave to start his own fund, people with knowledge of the plan said last month.
Under his new contract, Intrieri’s salary will jump to $7.5 million should the agreement be extended beyond its current expiration date of Dec. 31, 2013. He will also get a bonus of as much as $937,500 by Oct. 10, the filing says.
Intrieri can’t “seek, negotiate to obtain, solicit, discuss, arrange for, attempt to arrange for, establish, or attempt to establish” any employment, consulting or advisory relationship, an individual proprietorship, venture or any other activity through which he may obtain compensation, fees, profit sharing or similar payment, according to the contract. If he breaches this clause, he must pay Icahn’s firm $600,000 upon demand, according to the contract.
“I like non-competes,” Icahn said of the terms. “Every headhunter in the world is calling up our guys all the time.”
Since Icahn started his hedge fund in 2004, the firm’s top executives have received most of their pay by sharing in the fees and profits generated by the money-management unit. Intrieri earned $3.28 million in 2010, according to regulatory filings, under a contract that called for a $400,000 salary and an annual bonus of as much as $1.25 million.
Icahn said in March he no longer wanted to oversee cash for clients, citing concerns about the economy and unrest in the Middle East. Investors had already withdrawn much of their capital from his $7 billion fund group, leaving $1.76 billion of fee-paying assets.
The decision to return outside money was one reason for revising Intrieri’s contract, Icahn said in the interview, given that the firm would no longer be earning much in fees.
Intrieri specializes in distressed investing, having served as the lead partner in the bankruptcy and reorganization group at the Chicago office of the accounting firm Arthur Andersen LLP before its collapse. Bankruptcy investing has been a big source of profits for Icahn, the billionaire said.
“He is my right-hand guy,” Icahn said. “He has done a hell of a job.”
Intrieri, who didn’t return a telephone call seeking comment, received an undergraduate degree in accounting from Pennsylvania State University in 1984.
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