HealthSouth Options Award To Mottola Is Off the Charts
In February 2002, the board of HealthSouth Corp. awarded 250,000 stock options to Thomas D. Mottola, then head of Sony Corp.'s music division, a grant whose value surged to $1.2 million within three months.
Now for the head scratcher: Why?
Lots of companies pay outsiders with stock options for legal and consulting services, even celebrity endorsements. But HealthSouth's award to Mr. Mottola stands apart. While common among early-stage companies, particularly in Silicon Valley, the practice is unusual for established companies in mature industries such as health care. Even odder is the notion that a pop-music kingmaker would be paid options for advising a hospital chain.
As it turns out, at the same time HealthSouth was awarding Mr. Mottola stock options, HealthSouth's then-chairman and chief executive, Richard M. Scrushy, was trying to promote a fledgling pop band called 3rd Faze, a trio of young women he had helped put together who had been touring with a HealthSouth-sponsored roadshow. Mr. Mottola signed the band to a record deal with Sony Music in July 2002, five months after the options award. Mr. Mottola never exercised the options.
Mr. Mottola referred calls to his publicist, Howard Rubenstein of New York. Mr. Rubenstein says Mr. Mottola didn't know about the options award until last week when asked about it by a reporter. There was no quid pro quo between Mr. Mottola and Mr. Scrushy or HealthSouth , the publicist says. "He thinks it's strange that he was awarded options without telling him," says Mr. Rubenstein, though he does say Mr. Scrushy last year had approached Mr. Mottola about paying him options as an outside adviser.
The grant to Mr. Mottola, who helped make Mariah Carey and Jennifer Lopez household names before parting ways with Sony in January, was the largest single options award ever made by HealthSouth under its 10-year-old "consultants' stock option plan." Doctors and lawyers affiliated with HealthSouth also received options under the plan, as did athletes who made promotional appearances. While not unheard of, such awards to outside consultants are "not in the normal course of business for large publicly held companies," says David Chun, chief executive officer of Equilar Inc., a compensation-analysis firm in San Mateo, Calif. "They'll typically just pay it out in cash."
A HealthSouth spokesman, Andrew Brimmer, says the company made the options award to Mr. Mottola after Mr. Scrushy advised the board that it would help further HealthSouth's "entertainment strategy." An attorney for Mr. Scrushy, Donald. V. Watkins, says "the relationship with Tommy Mottola was above-board and entirely appropriate under all applicable laws and rules," noting that companies are allowed to award options to nonemployees.
Amid the Justice Department's widening investigation into accounting and tax fraud at HealthSouth , much of Mr. Scrushy's life has spilled into public view, including trappings of wealth and his affinity for the music industry. Mr. Scrushy once recorded his own country-music compact disc. In recent years, he devoted much of his time to staging the company's Go For It! promotional road show, which featured musical acts and appearances by athletes. The road show was aimed at promoting the HealthSouth brand name to youngsters.
As the five-month Justice Department probe continues, 14 former HealthSouth executives have agreed to plead guilty to fraud. Mr. Scrushy hasn't been charged criminally. His attorneys say the other executives carried out the fraud without Mr. Scrushy's knowledge.
The award to Mr. Mottola was listed in HealthSouth board minutes showing nonemployees who received grants under the company's options-compensation plan for consultants. Those minutes were among the thousands of documents turned over by HealthSouth to the House Committee on Energy and Commerce, which is investigating fraud at HealthSouth .
Mr. Mottola did have discussions last year with HealthSouth about possibly receiving stock options, Mr. Rubenstein says. In a March 2002 letter, Mr. Rubenstein says, HealthSouth asked Mr. Mottola to consider joining a "music advisory committee" to help with its concert and television promotions. Mr. Rubenstein adds that Mr. Scrushy separately told Mr. Mottola he could be paid in options for his services. However, the committee never was formed.
"He never got the options. He didn't know about them. All he knows was that there was a discussion about them," Mr. Rubenstein says. He adds that Mr. Mottola disclosed the HealthSouth proposal to his superiors at Sony and received clearance to pursue the advisory post. "Was there a quid pro quo for the band signing? Absolutely not," Mr. Rubenstein says. He says Mr. Mottola saw the chance to join the proposed committee as a way to have access to new venues for promoting Sony artists.
The first girl band that HealthSouth latched onto was one called Real in late 1999. The girls in one performance sang the national anthem at a HealthSouth annual meeting. But then Real broke up, and HealthSouth executives cast about for another band. Halie Clark, Minia Corominas, and Sara Marie Rauch eventually were cast as 3rd Faze.
Mr. Scrushy saw an opportunity for the band to make it big in the pop world, according to a person familiar with the band, which performed in skimpy, navel-baring attire and belted out songs like "Go Slow," a tune about teenage dating. The girls cut a record, and Mr. Scrushy and HealthSouth invested in a TV show that featured the band and athletes from the Go For It! road show.
HealthSouth's board awarded Mr. Mottola options to purchase 250,000 HealthSouth shares on Feb. 4, 2002. Other nonemployees were awarded options at the board meeting. But only Mr. Mottola's options immediately vested and were exercisable the day they were granted. Mr. Mottola's options had an exercise price of $10.90, the stock's market price at the time. By May 1, 2002, after HealthSouth shares had surged to $15.69, the options awarded to Mr. Mottola were valued at $1.2 million. Today, with the stock under $2, the options are well under water.
A Sony Music spokesman says 3rd Faze never did cut any record with the company after signing with it in July 2002; he declines to comment further. Meanwhile, 3rd Faze's rise to stardom has fizzled. HealthSouth says it's now out of the pop-music business. The company canceled its road show earlier this year. The band's own Web site is out of commission. A fan site says the trio has broken up.
HealthSouth原董事长一掷千金为红颜
2002年2月，HealthSouth Corp.董事会授予时任索尼(Sony Corp., 又名：新力)音乐子公司掌舵人的托马斯?莫托拉(Thomas D. Mottola)购买25万股股票的期权。不到3个月的时间，这些股票期权的价值就飙升到了120万美元。
有人不禁会问：为什么？
由于法律和咨询服务，甚至是出于名人效应，许多公司都向外部人士支付股票期权。但HealthSouth给莫托拉的股票期权完全是另一码事。这种行为在刚起步的新公司屡见不鲜，特别是在硅谷(Silicon Valley)，但对于卫生保健等成熟行业的大牌公司，这却并不常见。更令人匪夷所思的是，一名流行音乐巨星的后台老板竟然因为向一家医院连锁公司提供建议而获得了股票期权。 事实是，在授予莫托拉股票期权的同时，HealthSouth当时的董事长兼首席执行长里查德?斯克鲁希(Richard M. Scrushy)正在力捧一支初出茅庐的流行乐队。在他帮助下组建的这支三人女子组合名为3rd Faze，当时一直在参加HealthSouth赞助的巡回演出。2002年7月，就在莫托拉接受股票期权的5个月后，莫托拉促成该乐队以天价签约索尼音乐公司。莫托拉一直没有执行这些期权。
当记者要求采访莫托拉时，他将其在纽约的公共关系代言人霍华德?鲁本斯坦(Howard Rubenstein)推到了幕前。鲁本斯坦称，直到上周有记者问及的时候，莫托拉才知道他得到了股票期权。他说，莫托拉和斯克鲁希或HealthSouth之间没有任何幕后交易。
鲁本斯坦说，莫托拉认为，没有告诉他就授予了他股票期权，这很奇怪。但鲁本斯坦承认，斯克鲁希在去年确实与莫托拉接触过，计划按照外聘顾问的身份授予莫托拉股票期权。
莫托拉于今年1月离开索尼。此前，他曾使玛丽亚?凯莉(Mariah Carey)和詹妮弗?洛佩兹(Jennifer Lopez)的名字变得家喻户晓。
莫托拉从HealthSouth获得的股票期权是该公司…顾问股票期权"计划执行10年来数目最大的一笔期权。该计划也让HealthSouth的医生和律师获得股票期权，同时还有为公司作广告的一些体育明星。加利福尼亚州薪酬分析公司Equilar Inc.首席执行长戴维?春(David Chun)指出，尽管向外聘顾问支付股票期权的作法并非前所未闻，但对于大型上市公司而言，这确实不是正规操作。
HealthSouth发言人安德鲁?布里默(Andrew Brimmer)声称，公司向莫托拉授予股票期权是由于斯克鲁希向董事会建议说，这将有助于深化HealthSouth的…娱乐战略"。斯克鲁希的一位律师沃特金(Donald. V. Watkins)表示，与莫托拉的关系是光明正大的，完全符合所有现行的法律法规。他指出，各公司将股票期权授予非雇员是允许的。
随著司法部(Justice Department)对HealthSouth财务和纳税欺诈行为调查的深入，斯克鲁希的生活进入了公众的视线，其中包括他的各种财产和他与音乐界的密切关系。斯克鲁希曾录制过自己的乡村音乐CD。最近几年，他倾情投入在公司Go For It!巡演之中，里面有多位体育明星露面或出演音乐剧。巡演的目标是向年轻一代推广HealthSouth的品牌。
司法部的调查已经进行了5个月，HealthSouth的14名前高层管理人士已承认犯有欺诈罪。斯克鲁希还没有受到刑事指控。他的律师说，他对其他高层人士的欺诈行径并不知情。
授予莫托拉股票期权被记在HealthSouth的董事会会议纪要中。会议纪要记录了根据…顾问股票期权"计划获得股票期权的非雇员名单。HealthSouth将这些会议纪录同其他数千份文件一起上交给了调查该公司欺诈行为的众议院能源和商务委员会(House Committee on Energy and Commerce)。
鲁本斯坦称，莫托拉去年确实曾与HealthSouth探讨过接受股票期权的事宜。在2002年3月的一封信函中，HealthSouth曾邀请莫托拉加入公司的音乐顾问委员会，帮助公司筹划音乐会和电视推广活动。不过，这个委员会最终没有建立起来。
鲁本斯坦说，莫托拉从来没有得到期权，他对此毫不知情，他只知道曾经讨论过股票期权的事。鲁本斯坦还说，莫托拉曾向他在索尼的上司透露过HealthSouth的提议，得到可以接受顾问职务的许可。鲁本斯坦说，在乐队签约的问题上绝对没有幕后交易。他说，莫托拉在拟议成立的委员会任职是为了给索尼的艺术家寻找更多的演出机会。
2002年2月4日，HealthSouth董事会给予了莫托拉购买25万股股票的期权。那次董事会还决定给予其他一些非公司雇员以股票期权，但仅有莫托拉的股票期权在会议当天即可授予并执行。莫托拉手中期权的执行价为10.90美元，即该股当时的股价。到2002年5月1日，HealthSouth股价已经涨到15.69美元，因此莫托拉的期权价值120万美元。不过，该股目前低于2美元，这份期权现在一文不值。
