IBJNews

HHGregg gets $40M from life insurance on former CEO

Back to TopCommentsE-mailPrintBookmark and Share

Indianapolis-based HHGregg has collected a $40 million payout from a life insurance policy it had taken out on former executive chairman Jerry W. Throgmartin, who died in January after a sudden illness.

The electronics retailer said in a regulatory filing it plans to pay $600,000 to Throgmartin's personal estate in accordance with the terms of an employment agreement and will keep $39.4 million for "general corporate and working capital purposes." 

HHGregg may opt to use the life insurance proceeds to purchase company shares owned by Throgmartin's estate, a local wealth adviser suggested. At last report, Throgmartin owned about 2.5 million shares worth about $30 million.

The company did not specifiy its plans, but noted it does not expect any tax expenses related to the insurance windfall.

Companies like HHGregg purchase so called "key man" life insurance policies to protect against potential expenses stemming from the loss of particularly important executives. Lenders may actually require a policy in instances where a company and an executive are particularly intertwined.

Throgmartin, 57, had served as chairman and CEO of the Indianapolis-based company from 2003 to 2009, when he became executive chairman. His grandfather founded the company in 1955. He oversaw explosive growth at the retail chain.

Throgmartin died of complications from meningitis Jan. 22 while visiting his ranch in Colorado.

In filings with the Securities and Exchange Commission, HHGregg has listed its dependence on "key management" as one of the risk factors that could affect the company's results. The filings do not say whether the company has "key man" life insurance policies on other executives.

A common question with such policies is whether to retain them once an executive takes a less active role in a company, as when Throgmartin relinquished the role of CEO in 2009.

Under Throgmartin's leadership, HHGregg grew from a local consumer electronics retailer into a national player with more than $2 billion in annual revenue.

ADVERTISEMENT

  • Family Tree
    My name is Jesse W Throgmartin and my fathers name is Jerry W Throgmartin. I've never met him and was told he died 36 years ago. I was born 10-24-1976. Roughly the same time Jerry Throgmartin started working at the electronics store. I was told he died roughly the same time. I cannot find a obituary for my father ANYWHERE! I am looking for every possibility and every time I I put in his name anywhere on the computer I am redirected to Jerry William Throgmartin. William is my sons middle name. My email is jthrogmartin@yahoo.com and I live in Cedar Rapids Iowa. Thank you
  • Good Move
    Congratulations to the Board of Directors for having the foresight to plan for an event no one ever wanted to happen. Key Man Insurance is needed when the loss of one or more very key personnel could require hugh expenditures as a business plans for the future after the loss of a key executive.

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. "bike lanes, specialized lighting, decorative signage, public art, grass medians, trees and rain gardens" These are all nice things to have, but can we freaking get the hundreds of potholes all over the city fixed first?!?!?!!?!?!

  2. When a criminal with multiple prior convictions serves five days of a one year sentence and later kills a police officer with a weapon illegally in his posession, residents of Boone County need to pay a tax to drive to work... PERFECT Progressive logic.. If, on the other hand, a fund were to be set up to build more prisons and hire more guards to keep the known criminals off the streets, I'd be the first to contribute.

  3. Not a word about how much the taxpayers will be ripped off on this deal. Crime spirals out of control and the the social problems that cause it go unheeded by an administration that does not give a rats behind about the welfare of our citizens. There is no money for police or plowing snow (remember last winter) or or or or, but spend on a sports complex, and the cash flows out of the taxpayers pockets. This city is SICK

  4. Sounds like a competitor just wanted to cause a problem. I would think as long as they are not "selling" the alcohol to the residents it is no different than if I serve wine to dinner guests. With all the violent crime happening I would think they should turn their attention to real criminals. Let these older residents enjoy what pleasures they can. Then again those boozed up residents may pose a danger to society.

  5. Where did the money go from the 2007 Income tax increase for public safety that the Mayor used to stir opposition and win the election and then failed to repeal (although he promised he would when he was running for election)? Where did the money go from the water utility sale? Where did the money go from the parking meter deal? Why does the money have all these funds for TIF deals and redevelopment of Mass avenue, and subsidy for luxury high rises, parking garages in Broad Ripple, and granola chain grocery stores but can not find the money to take care of public safety. Commuters shouldn't have to pay the tax of failed leadership in Marion County by leaders that commuters have no say in electing. Taxation without representation.

ADVERTISEMENT