Executive who lost his job at Fidelity suing over options
He says plans were managed in ‘arbitrary and capricious’ way
It was bad enough that Mark P. Sullivan lost his job. But after he left Fidelity Investments, the former executive contends, the Boston-based financial services giant refused to pay money owed him from accrued stock options.
Sullivan sued Fidelity two weeks ago in Middlesex Superior Court, saying the company must reimburse him for thousands of company stock options he was awarded under incentive compensation plans.
Though employment severance disputes are common, the lawsuit is unusual because it involves one of the state’s largest and most prominent companies and a former high-ranking executive. The 53-year-old Sullivan served in various financial positions at the company, including chief financial officer for Fidelity Employer Services Co., which provides benefits and human resources administration to companies, from 1994 to Dec. 31, 2008, when he was let go. Sullivan is now chief financial officer for another prominent local company, Aspen Technology Inc. in Burlington.
Fidelity spokeswoman Anne Crowley said, “We don’t believe his claims have merit.’’ Sullivan, though his attorneys, declined to comment.
Sullivan is seeking payment for options that had not vested at the time of his departure. In his suit, Sullivan contended that Fidelity administered the three incentive compensation plans “in an inconsistent, arbitrary and capricious manner,’’ paying some employees for unvested options when they left, while refusing to do so for others.
So far, Sullivan said, Fidelity has refused to redeem 975 shares that vested Dec. 31, 2009. He also has 1,700 more shares that are set to vest at the end of this year and 1,200 shares that vest at the end of 2012. Sullivan was paid by Fidelity for 2,160 shares that were fully vested when he left.
The lawsuit did not estimate how much the shares are potentially worth, and Sullivan’s attorneys did not respond to a request for an estimate.
Sullivan also said the compensation plans at issue did not specifically require participants to remain Fidelity employees in order to meet the vesting requirements. Sullivan is not seeking compensation for unvested options in a separate plan that required participants to re main with the company to vest, according to his lawsuit.
The lawsuit did not explain why Sullivan lost his job, but it came at a time when Fidelity was cutting its global workforce to become more efficient and boost its profitability. Fidelity reduced its worldwide headcount from 46,500 at the end of 2007 to about 37,000 today, through a mix of layoffs and attrition.
After losing his job at Fidelity, Sullivan worked as a financial consultant for Aspen Technology for a few months, then became the firm’s CFO in July 2009. Aspen Technology develops software to help optimize manufacturing in industries that develop products using a chemical process.
Todd Wallack can be reached at email@example.com.