C3.ai Inc., a software development company, has disclosed details about the severance package of its former General Counsel Richard “Chip” Lutton Jr.
According to Lutton’s employment agreement, if he was terminated without a cause within his first year of service, 20% of his restricted stock unit (RSU) awards would immediately vest. As the proxy statement filed on August 24th by C3.ai reveals, Lutton, who joined the company in September 2021, received $22.6 million in total, out of which approximately $22.1 million was in form of stock. This placed him in line for a potential payout of $4.4 million from C3.ai.
In addition to RSUs, Lutton also earned nearly $700,000 in total compensation from C3.ai in fiscal 2023. Founded by CEO Thomas Siebel, C3.ai also consists of high-profile board members such as the former Secretary of State, Condoleezza Rice, and D. Bruce Sewell, a former top lawyer at Apple and Intel Corp.
Following his departure from C3.ai, no one from the company, including Lutton or his successor as legal chief, Derron Blakely, commented on the circumstances leading to his exit. Lutton left C3.ai in June 2022 and had no outstanding equity awards as of April 30 of this year. His severance package included a $600,000 separation payment, a prorated bonus of roughly $127,000, in addition to getting to keep his $100,000 signing bonus.
Lutton, who served for over a decade at Apple, was appointed first-ever general counsel for Nest Labs Inc. in 2012. The startup was later acquired by Google, where Lutton served as a senior legal director until he joined C3.ai. He currently serves as the head of legal for Yohana LLC, a personal assistant startup based in Palo Alto, California.
The recent disclosures about Lutton’s severance package come as C3.ai is grappling with legal challenges and corporate governance issues, including a derivative lawsuit from a shareholder who accuses the company of misleading investors about its financial health prior to its public offering. The CEO, Siebel, however, has defended the company and accused critics of trying to manipulate the company’s stock price.