Sotheby's to Offer Voluntary Buyouts

Sotheby's said it would offer voluntary buyouts to cut its head count and compensation costs.

The buyouts, expected to be completed in the first quarter of 2016, are being offered to "most Sotheby's employees in jurisdictions where it is practical to do so," according to a Securities and Exchange Commission filing. It said employees' decisions to be bought out would be accepted only if management approves.

Sotheby's said the related severance costs are expected to hit fourth-quarter results and cannot be estimated yet.

Shares of Sotheby's were down 1.3% in midday trading Monday.

The venerable auction house has had a roller-coaster few years, welcoming former sports executive Tad Smith as its new chief executive in March amid increasing clamor from activist shareholders calling for a leaner, more profitable business.

Each buyout participant will be entitled to receive severance benefits based on the participant's position, years of service and base pay, and includes, in certain circumstances, continued vesting of equity awards. The cash severance payment will be made in a single lump sum payment as soon as possible after termination.

Last week, Sotheby's posted stronger-than-expected results and a loss that narrowed compared with the same period a year ago, boosted by inventory sales and the performance of its finance segment.

The company said, however, that while net auction sales increased by 15% to $48 million during the quarter because of the favorable scheduling of a contemporary art sale, commission revenues decreased mostly because of weaker sales in higher-margin categories such as old master paintings, Asian art, and jewelry.

Write to Anne Steele at [e-mail]

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(END) Dow Jones Newswires

November 16, 2015 14:05 ET (19:05 GMT)

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