TiVo Tweaks Interim CEO Package as Future Remains in Flux
TiVo has tweaked and extended its employment deal with interim CEO Raghu Rau as the video software and patent company continues to backburner plans for a permanent successor and amid a strategic review that could see TiVo go private or sell off a piece of its business.
The amendments, detailed in this 8-K filing and activated on December 26, 2018, include provisions in the face of a change in control of the company or if TiVo does end up hiring a permanent CEO.
Rau, a TiVo Inc. (Nasdaq: TIVO) board member, was named interim CEO in July 2018 after former CEO Enrique Rodriguez departed to become CTO of Liberty Global Inc. (Nasdaq: LBTY). Last August, TiVo indicated that a search for permanent successor was essentially on hold. (See Rodriguez Bolts Tivo to Be Liberty Global CTO.)
Under the revised deal, Rau continues as an at-will employee with a base salary remaining at $750,000 per year (semi-monthly installments of $31,250 each). He was also granted an additional restricted stock unit award, with a total value of $2 million, on top of a similar $2 million RSU award granted when he took the interim CEO role last year. Rau's agreement also has a clause that prevents him from poaching employees for one year after his relationship with TiVo ends.
The future of TiVo remains up in the air, though it has expressed options that include taking the company private, divesting its products business and retaining its intellectual property business, or selling off the whole lot. (See Tivo Might Sell Off Its Products Business .)
Speaking on the company's Q3 call in November 2018, Rau said TiVo was in "various active discussions" about what to do, but acknowledged that "the process is taking longer than we had hoped." However, the company's intention is to wrap up its strategic review process by its fiscal Q4 earnings call. That puts the decision into a February 2019 timeframe.
TiVo's ongoing litigation with Comcast Corp. (Nasdaq: CMCSA, CMCSK) could be a cause in that delay. Following an International Trade Commission ruling, Comcast disabled a remote recording feature for its X1 platform, and TiVo and Comcast are still fighting at the ITC on three other patents. Comcast and TiVo are also battling in a set of district court cases that could involve monetary damages, depending on how they shake out.
In the meantime, Comcast has had some success with inter partes reviews (IPRs) with the Patent Trial & Appeal Board to invalidate some TiVo claims. TiVo intends to appeal "many of the adverse determinations" at the PTAB, Rau said.
Neither side appears ready to blink. "We expect Comcast will ultimately pay a license for our innovations, just as its pay-TV peer companies do and Comcast did in the past," Rau said on the Q3 call, holding that the financial damages, if it comes to that, could "run into the tens of millions, or even the hundreds of millions."
— Jeff Baumgartner, Senior Editor, Light Reading