Mr. Noon To Receive 20,000 Stock Options -- If He Sticks Around For A Year. WHY?

See tonight's SEC Form 8-K text, at Item 5.02(b). Why 20,000 stock options for Mr. Noon? Why? Shareholders should ask the board this question.

I do understand transition planning, but I'm not sure Mr. Noon should be getting anything more than cash to stick around. What is this for? What, exactly?:

. . .Mr. Noon will also receive, subject to approval of the compensation committee of the Company’s board of directors, an option to purchase 20,000 shares of the Company’s common stock, vesting quarterly over four years beginning August 31, 2012, so long as he remains employed by the Company. . . .

Afterall, the grant to Mr. Noon by the compensation committee of the board, of these stock options is presumably at a price which reflects a dip in the market-value, due to the mis-statement of the size of the GAAP loss from continuing operations. Recall that Mattersight was trading around $9 a share before the announcement that GAAP Losses per share had been vastly understated in 2011 due to an elementary accounting error.

Now the stock is at $7.80 or so. Granting Mr. Noon these "cheapened" stock options effectively allows him an opportunity to reap additional income -- from his and Mr. Conway's "mistakes".

That cannot be sensible corporate governance -- even if the company is feeling a cash crunch. Recall here that Mr. Conway recently crowed about the $26 million of cash on hand (at year end 2011) -- and that makes Mattersight (he said) attractive, as a takeover candidate. I am sure some of that cash could be used appropriately to create a modest stay-bonus opportunity for Mr. Noon -- if his transition services are so desperately needed on Wacker Drive, Chicago.
This company seems -- more than occasionally -- to take actions without thinking them through. This may be one of those times.

Why should a guy exiting the CFO role get a cheap stock option denominated stay bonus?

If, on the other hand, we posit that Mr. Noon is the guy who is "falling on his sword" (to protect Mr. Conway's job) -- then, at least the cheap options make internal sense: they are providied to keep him happy, because if he were to complain to the board -- maybe Mr. Conway would be asked to step aside as well.

As ever, be careful out there.