Former Hercules CEO to receive $11.5m severance package

Manuel Henriquez, also the venture debt lender’s former chairman and founder, stepped down after prosecutors charged him with taking part in a college admission bribery operation, to which he pleaded not guilty.

Hercules Capital and its former chief executive Manuel Henriquez have entered into an $11.52 million separation agreement, comprising $2.5 million in cash and $9.02 million of equity awards, according to a Securities and Exchange Commission filing.

The business development company has officially severed ties with Henriquez, who has been indicted in US federal court on counts of conspiracy to commit money laundering as well as conspiracy to commit mail and wire fraud and honest services mail and wire fraud.

The charge stems from Henriquez’s supposed participation in a college admission bribery scandal that broke in March. The former CEO, who stepped back from his position in March, has entered a plea of not guilty to the allegations, which are not related to his stewardship of Hercules.

Hercules and Henriquez’s attorney declined to comment. Henriquez could not be reached for comment.

As part of the separation agreement, set to take effect 23 July, Henriquez will give up 1.29 million restricted shares along with his restricted shares earned based on performance, which for the set target was 812,348 units. He also has given up any severance benefits outlined in an agreement between Hercules and Henriquez in October 2017.

In turn, the former CEO will receive an initial cash payment of $1.5 million followed by additional $500,000 payments in January and July 2020. He also will receive 692,841 shares of common stock, worth approximately $9.02 million, based on Tuesday’s intraday trading price.

As part of the October 2017 accord, outlined in an SEC filing, Henriquez would have been paid twice his 2018 salary of $855,000 and the three-year average of his annual bonuses, the most recent of which was 2018’s $1.9 million.

In addition, he would receive any unpaid bonuses, a pro rata bonus for the year-to-date performance period, and would be reimbursed for any premiums paid to the US COBRA health insurance programme for himself and any dependents. In addition, his equity awards would have continued vesting.

Henriquez received a cumulative compensation package of $21.40 million for 2018, according to materials filed in connection with Hercules’ annual shareholders meeting. His remuneration consisted of a salary, bonus, stock awards and other forms of compensation. In 2017 and 2016 he earned $8.24 million and $6.78 million, respectively.