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Blockbuster Ups Shepherd, Next CEO?

13 Apr, 2007 By: Erik Gruenwedel

Blockbuster Inc. April 13 announced it has named 12-year veteran executive Nick Shepherd to the vacant position of EVP and COO.

The COO position had been open since the end of 2004, following the departure of Nigel Travis.

Shepherd, who was EVP and president, worldwide stores for Blockbuster, will assume reporting responsibility for Blockbuster Online, in addition to his previous duties.

He will be paid a base salary of $700,000 in addition to an undisclosed target bonus of 60% of his annual salary, according to a filing with the Securities and Exchange Commission.

The COO is slated to receive a “retention” bonus of $1.12 million if he is employed by Blockbuster on June 30, 2008.

Shepherd also receives 500,000 in stock options vesting annually in three installments beginning April 11, 2009.

Shepherd began his Blockbuster career in marketing and assumed direction of international operations, including VP and managing director of the Dallas-based company's U.K. business following the dismissal of London-based executive Christopher Wyatt last summer.

“This move recognizes the many valuable contributions Nick has made to Blockbuster in his years with the company,” said chairman and CEO John Antioco, to whom Shepherd reports. “His unique domestic and global experience, combined with his keen leadership skills, is a tremendous benefit to [the company].”

Antioco has announced he is leaving Blockbuster at the end of the year.

Speculation that Shepherd could be next in line for Antioco's position remains up in the air with board member Carl Icahn likely looking outside Blockbuster for the next CEO, says analyst Michael Pachter with Wedbush Morgan Securities in Los Angeles.

“I don't think you can surmise [Shepherd automatically replacing Antioco],” said Pachter.

Blockbuster spokesperson Randy Hargrove confirmed Shepherd is a candidate for the CEO position, but added the board is undertaking a search that looks at external candidates as well.

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