Opinion ID: 147653
Heading Depth: 3
Heading Rank: 4

Heading: Smith’s Letter to McBride

Text: After his discussion with Johnson, Smith drafted letters to McBride and Mott. The letter to McBride, dated February 17, 2006, stated: As we discussed in our meeting on February 15th, your annual compensation will be reduced from $230,000 to $85,000, effective March 1, 2006. However, if the Western Division net branch contribution is 35 [basis points] by year-end, you will receive your normal year-end incentive based on your incentive plan. In addition, if you achieve these results the difference between your initial salary and the reduced salary as of March 1, 2006 will be paid to you. I hope you believe this is a fair plan and something you and [Mott] can work towards to make 2006 a successful year for the Western Division. (R. Vol. IV at 685.)7 He also drafted a similar letter to Mott and showed copies of both letters to Joyce and Renner. He then gave the letters to his assistant to mail as he was scheduled to be out of the office for a period of time. Smith neither spoke to McBride (or Mott) nor checked employment agreements prior to directing the letters to be sent. McBride received Smith’s letter in his Cheyenne office on February 24, 2006. He was “absolutely shocked” because no one had discussed it with him. (R. Vol. III at 413.) He believed it indicated Market Street “wanted [him] gone.” (Id.) On February 27, Johnson signed an “Associate Status Change Form” indicating McBride’s salary was being adjusted to $85,000 effective March 1, 2006. (R. Vol. IV at 701.) The form was to sending the letters reducing McBride and Mott’s salaries. He did not recall Johnson telling him to speak with McBride and Mott before sending the letters but conceded he knew he should have done so. 7 In addition to informing McBride of a reduction in his Annual Base Salary, the letter’s reference to “35 [basis points]” made it more difficult for McBride to earn the “Net Contribution Incentive.” -7- also signed by Renner and file stamped: “ENTERED FEB 27 2006 Human Resources.” (Id.)