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Wednesday
May042011

When is an Incentive Plan not an Incentive Plan?

Monte Cahn, a domain pioneer and founder of domain registrar Moniker, has sued Oversee.net over the terms of a a $13 million incentive plan that Oversee never paid.  Oversee apparently claims that Cahn failed to meet the terms of the incentive plan, while Cahn contents that Oversee shifted his responsibilities in such a way that it was impossible for him to meet the terms of the plan.  You can read the entire filing here.

Cahn had actually sold Moniker to Seevast in 2005. Oversee.net apparently approached Seevast in 2007 with an offer to buy the business.   Cahn's complaint alleges that the companies agreed to a purchase price of 35 million dollars, but Oversee required that  Cahn commit to join Oversee.net for at least three years.  The alleged "Management Incentive Plan" of up to 13 million dollars was apparently one of the major reasons for Cahn to join the company. The papers filed report that Cahn would also receive 300,000 shares in Oversee.net, $250,000 base salary, a signing bonus of $75k, and a yearly retention bonus of $75k.

We've heard Monte's side and at some point we will likely hear Oversee.net's side of the story.  If you believe what Monte is saying, it sounds like Oversee.net never really intended to pay the incentive, and that they essentially "moved the goalpost," changing his job in such a way that he could not make the numbers.  If there is any moral to this story it may be to steer clear of overly-creative incentive plans.

The leadership at Oversee.net undoubtedly understood that Moniker was much less valuable without Monte Cahn. Monte's radio show "Domain Masters" was the first Internet radio show and podcast to focus on the domain industry.  Monte and Moniker led the way in locking down domain names so that nobody could steal them.  We'll see if this suit gets settled, but I'm sure we have not heard the last from Monte Cahn in this industry.

 

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