Siebel’s C3.ai Discloses Severance Package for Former Top Lawyer

C3.ai Inc., a software development company whose stock price had surged earlier this year, recently disclosed what its former general counsel Richard “Chip” Lutton Jr. received for just 11 months of work.

Lutton’s employment agreement called for 20% of his restricted stock unit awards to immediately vest upon his termination without cause within his first year working for the company, according to a proxy statement filed Aug. 24 by C3.ai. Of the $22.6 million that Lutton received after being hired in September 2021, approximately $22.1 million of that sum was comprised of stock, putting him in line to earn a potential $4.4 million payout from C3.ai.

Lutton, a former chief patent counsel at Apple Inc., also received nearly $700,000 in total compensation from C3.ai in fiscal 2023, according to the Redwood City, Calif.-based company’s most recent proxy. C3.ai, which went public in December 2020, is led by chief executive Thomas Siebel and boasts high-profile board members such as former US Secretary of State Condoleezza Rice and D. Bruce Sewell, a former top lawyer at Apple and Intel Corp.

C3.ai and Lutton didn’t respond to requests for comment about the circumstances surrounding his departure. Nor did Derron Blakely, a former deputy general counsel at C3.ai who succeeded Lutton as legal chief.

Baker Hughes Co., one of C3.ai’s largest shareholders, recently cut its stake in the company and a shareholder filed a derivative lawsuit against C3.ai, accusing the company of misleading investors about its financial health prior to going public. C3.ai and its management have also come under scrutiny over missed product deadlines.

Siebel has defended the company, accusing its critics of being short-sellers seeking to benefit from “stock price manipulation.”

Lutton had “no outstanding equity awards” as of April 30 of this year after leaving C3.ai in June 2022, per its proxy. Lutton, in addition to the accelerated vesting of his stock, also received a $600,000 separation payment and a prorated bonus of nearly $127,000. Lutton was also permitted to retain the entire $100,000 signing bonus awarded to him by C3.ai.

Lutton spent more than a decade in-house at Apple. He left the consumer electronics giant at the end of 2011 and the following year was named the first-ever general counsel for Nest Labs Inc., a home automation startup founded by Apple’s iPod design team. Nest was sold for $3.2 billion in 2014 to Alphabet Inc.’s Google, where Lutton was a senior legal director until he joined C3.ai.

In July, Lutton was named head of legal for Palo Alto, Calif.-based personal assistant startup Yohana LLC, which didn’t respond to a request for comment.