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Calpine CEO Gets $3 Million Contract for 2 Years, Plus Bonuses

Chapter 11 bankruptcy-based Calpine Corp. announced in a federal filing Tuesday that its new CEO Robert P. May has a two-year contract providing $1.5 million annual base salary, a $2 million signing bonus, and the possibility of earning minimum bonuses for the two years of $3.75 million collectively.

The contract's initial two-year term ends Dec. 31, 2007, and is automatically renewable for another 12 months "unless either party provides written notice to the other at least 180 days prior to the date of his or its intention not to renew," according to the contract submitted to the federal Securities and Exchange Commission Tuesday. "Mr. May shall continue to serve as a member of the board for as long as he continues to be nominated and elected."

May, 56, has a track record of helping struggling companies recover, including stints at HealthSouth Corp. and Charter Communications among others. He was named Calpine's CEO Dec. 12, two weeks after the board fired founder/CEO Peter Cartwright and long-time CFO Robert Kelly (Daily GPI, Dec. 13). May spent his early years as an executive at Federal Express (1973-93).

Calpine Chairman Kenneth Derr, former CEO of Chevron, signed the employment contract with May. Upon announcing his selection two weeks ago, May relieved Derr of his interim duties as CEO. Cartwright had been asked to leave after the Thanksgiving holiday.

At the time of his election to the board and the CEO spot, May was described by Derr as an executive with "proven ability" in implementing and managing operational and financial improvements, as was "successfully demonstrated" at four major corporations over the past 30 years. "We are excited about what Bob brings to Calpine," said Derr, citing May's "leadership qualities, experience, and knowledge."

A week after taking the helm, May led Calpine into Chapter 11 bankruptcy, something his predecessors had resisted for months, if not years (see Daily GPI, Dec. 22).

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