Friday, June 01, 2007

Fantasy Islands

We frequently remind ourselves that a billion of the world's people live on a dollar a day or less so we must not let the lifestyles of Proxyland make us feel underprivileged. Today, however, our moral resolve has broken down. We’ve discovered Kenneth LeStrange, Chairman, CEO and President of Endurance Specialty Holdings Ltd. (ENH), and we are self-indulgently bemoaning the wretched squalor of our own existence.

In its March proxy Endurance noted it had no employment contracts with its execs, but casually mentioned it had one in the works for Mr. LeStrange, which popped up in today’s filings. (He's been running the joint since 2001, so why the sudden impulse to “embody the terms” of his tenure in writing? Don’t know, but the change of control payments ain’t half bad.)

The contract sets Mr. LeStrange’s salary at a million, which the Board can bump up if it likes but can’t cut without his say-so. Then there are the usual bonuses and equity awards, though we can’t guess how much because the formulas are contained in a mysteriously unfiled Exhibit A; as a Lost fan, we are confident this document is buried somewhere on The Island and will be discovered next season. Last year these extras added up to about 1.5 million for Mr. LeStrange.

On top of cash, equity and the usual retirement plans and other benefits, he gets a $200K annual housing allowance and is entitled to “at least 400 hours of usage of a Learjet 60 or comparable private aircraft” for business travel. If his bags are packed but the island's Learjets have been commandeered for Rosie O'Donnell Watch, he goes first class with an airline club membership thrown in. He’s fully compensated for U.S. taxes on the housing and travel payments and this gross-up is also grossed up. All this plus five weeks paid vacation.

Nice, but why does Mr. LeStrange engender more envy than better paid, less competent folks we’ve written about? Because he grew up on the same accursed island where we did - Long Island – but now enjoys his employer’s largesse on the tranquil isle of Bermuda. No fair. Our childhood ambitions never included running a reinsurance company because dammit no one told us there was such a job or that we’d absolutely end up on Bermuda if we did it.

If Mr. LeStrange departs the company (except for cause) and relocates away from Bermuda, Endurance foots the bill for that too. If he’ll promise to endure just one miserable hour on the L.I.E., we’ll gladly chip in a few bucks to get his butt back here.