With one of his three top executives out the door and another on his way, Carl Icahn wants to make sure he holds on to the last one.
Icahn has given Vincent Intrieri, whom he called his "right-hand guy," a big raise as he returns outside capital from his Icahn Enterprises hedge fund. That decision will all but eliminate the New York firm's fee income—and Intrieri was one of the firm's executives who shared in those fees.
But Intrieri's raise—from a $400,000 salary last year to a $6.5 million salary—comes at a price. Icahn has inserted a non-compete agreement into Intrieri's contract that forbids him to "seek, negotiate to obtain, solicit, discuss, arrange for, attempt to arrange for, establish, or attempt to establish" another job. If he breaks the non-compete, he's on the hook for $600,000, payable to Icahn.
"I like non-competes," Icahn told Bloomberg News. "Every headhunter in the world is calling up our guys all the time."
The new deal for Intrieri—who will get a raise to $7.5 million if his contract is extended beyond the end of 2013, and who will get a bonus of up to almost $1 million next week—follows the exit last year of former principal executive officer Keith Meister and the planned departure of healthcare chief Alex Denner. Meister founded his own hedge fund and Denner plans to do the same.
"I can't stand in their way," Icahn said. "But I want to know the employee is not going to spend half his time thinking about how he can start his own hedge fund."
Intrieri has worked for Icahn for 13 years. A former Elliott Associates distressed-debt specialist, Intrieri helps manage Icahn's investments and oversees its operating companies.