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Originally published December 19, 2014 at 11:11 AM | Page modified December 21, 2014 at 8:50 AM

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ClearSign CEO gets golden handshake

Only weeks after boasting to shareholders about “one of the most exciting and productive periods in the company’s history,” ClearSign Combustion chairman and CEO Richard Rutkowski is out — by all appearances pushed, although he officially resigned.

By Seattle Times business staff

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I agree, typical Times one sided hatchet job with total lack of research. Biased to the max but not sure why. No... MORE
@Sea68 Well it obvious you know little to nothing about ClearSign, it's board or the former CEO. I would certainly like... MORE
@finerbyus I agree that if you take the time to study the technology you can see the potential for ClearSign's... MORE


For the second time, Richard Rutkowski has been dethroned as leader of a local public company.

Just weeks after boasting to shareholders of ClearSign Combustion about “one of the most exciting and productive periods in the company’s history,” Rutkowski is out as chairman and CEO.

But he’s not leaving empty-handed: The tiny Seattle developer of emissions-control technology will pay Rutkowski two years of salary totaling $750,000, according to a Securities and Exchange Commission filing.

That wouldn’t be much at some large enterprises, but it’s more than eight times all the revenue the 7-year-old ClearSign has ever reported.

Add in a $40,000 bonus promised for this year’s work, and the future payments amount to a quarter of the cash ClearSign has on hand. The golden handshake also comes with accelerated vesting of options and a year’s worth of benefits.

Rutkowski, who’d led the company since 2008, agreed not to sue or disparage or compete with ClearSign.

A company spokesman said it would have no further comment.

Reached at home, Rutkowski declined to comment except to say the parting arrangements were “all according to the employment contract.”

That contract would have expired Jan. 1 had it not been renewed in March for two years.

At Bothell-based Microvision, after a dozen years of uninterrupted losses, Rutkowski in 2006 was ousted by the board, as he acknowledged in news reports at the time. Microvision subsequently sued him, saying he owed $1.7 million in overdue loans; he countersued for $15 million. Three years later Microvision settled the litigation after recouping about $260,000.

At least Microvision had a small stream of cash from partnership deals; ClearSign does not.

The company, which says its technology makes flames burn cleaner and more efficiently in industrial and commercial boilers, furnaces and such, has raised about $23 million from investors, including an IPO almost three years ago. Its market capitalization is about $70 million.

But aside from $93,000 received last year from a collaborating company, ClearSign conceded in March that “we have earned no significant revenue since inception on Jan. 23, 2008.”

In what turned out to be his final media release last month, Rutkowski held out hope that “we may begin to generate revenue” in early 2015 from test installations of the company’s technology. He also said the company’s remaining cash of $3.3 million could suffice at least through the first quarter.

Perhaps that scenario didn’t satisfy the board or wasn’t materializing as described.

Although ClearSign issued a statement in which board member Scott Isaacson expressed “our heartfelt gratitude to Rick for his vision,” the company did not even give the standard “pursuing other interests” cover to its announcement of Rutkowski’s resignation.

The company said Stephen Pirnat, a ClearSign board member for three years, will take over as chairman and CEO in January.

— Rami Grunbaum:

Plum Creek CEO gives back stock

Elsewhere in the world of executive compensation ... Here’s a switch from the standard scenario:

Plum Creek Timber CEO Rick Holley this month returned shares worth nearly $1.9 million that were granted in February by the Seattle timber giant.

The explanation, reported in a regulatory filing, is that “he does not believe that he should receive such an award unless Plum Creek’s stockholders see an increase in their investment return.”

The company’s stock has indeed badly lagged the S&P 500. As of Dec. 15, Plum Creek shares were down 9 percent over 21 months, while the S&P was up 11 percent; over three years it was Plum Creek up 16.6 percent to the S&P’s 63.3 percent.

(Weyerhaeuser shares have more than doubled over that three-year period, as it followed Plum Creek’s earlier conversion into a real-estate investment trust.)

The 44,000 shares of restricted stock, vesting over three years, were a one-time grant to Holley in 2013 — one of those incentives that CEOs supposedly need to stay on the job.

But in a regulatory filing the company said Holley “remains fully committed to Plum Creek and intends to lead the company through this challenging and prolonged economic cycle.”

Analyst Steve Chercover of D.A. Davidson said Holley’s move “is unusual, but I think it’s highly ethical and a good practice.”

Holley has led Plum Creek through a couple of corporate incarnations since 1994, making him “one of the longest-tenured chief executive officers in the timber industry,” the company says.

He’ll still have plenty of incentive to stay on the job. Holley received more than $4 million in compensation for 2013, aside from the grant of restricted stock.

And he has 750,000 in stock options expiring in 2016 and beyond; since their strike prices vary from $33 to $43, they have limited value at Plum Creek’s current share prices around $42 — but provide plenty of reasons for working to push that price higher.

— Rami Grunbaum:

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