In the wake of his termination, former Healthways COO Matt Michela has filed suit in U.S. District Court asking for more than $3 million in compensation for what he deems to be an unfair ousting.
Read more below from an Aug. 25 article by Geert De Lombaerde, editor of our sister publication NashvillePost:
The chain of events that ended with Michela's exit two Fridays ago started with the firing in May of longtime CEO Ben Leedle. Michela says interim CEO Alfred Lumsdaine and General Counsel Mary Flipse were among several Healthways officers who encouraged Michela to apply for the CEO job. In his complaint — read in it full here — Michela says he sat down for an initial interview with the nominating and governance committee of Healthways' board the day after the company went public with word of Leedle's exit.
Other "positive discussions" about the CEO job followed in June and July but things started going south on Aug. 4, when then-Chairman Donato Tramuto called Michela to tell him he would not be CEO and that Tramuto himself would take the top spot come Nov. 1. Michela alleges Tramuto told him that he was in line to succeed Tramuto as CEO after a few years but that Michela then told him he was not interested and would like to discuss "a mutually agreeable exit plan."
Three days later, the suit alleges, Michela received a call from Ross Scott, Healthways' HR chief, saying the company would terminate him for cause if he chose not to resign from his post. Michela stayed on and was served his walking papers — in a notice citing misconduct and dishonesty and signed by Flipse — on Aug. 14.
Michela contends the firing was without cause and thus has triggered various compensation provisions in his contract. Among them are two years worth of his annual salary, the immediate vesting of more than 95,000 restricted shares — worth more than $1.1 million — and 18 months worth of medical benefits. In all, he is seeking damages of at least $3 million from a jury.
Shares of Healthways (Ticker: HWAY) fell 4 percent to $11.97 during Monday's rough market session. Year to date, they're down 40 percent.