Blockbuster will hit the street for a new CEO

Blockbuster Inc., which last fall launched an aggressive in-store return program to gain ground on rival Netflix Inc., will be soon be looking for a new CEO.

Blockbuster, No. 70 in the Internet Retailer Top 500 Guide, announced yesterday that chairman and CEO John Antioco has received a new employment agreement, but Antioco will also leave the company by the end of next year.

Under the amended and restated employment agreement, Antioco will receive a 2006 bonus of $3.05 million, which reflects a compromise between the $2.28 million bonus previously conditionally offered by Blockbuster’s board and $7.65 million, which is the amount Antioco was entitled to receive under his previous employment agreement and a 2006 senior bonus plan, the company says. At the conclusion of his employment, Antioco also will receive a lump sum payment of $4.98 million as compared to a lump sum payment of $13.5 million that he would have been entitled to receive if he had been terminated without cause or had resigned for good reason on Dec. 31, 2007, under his previous employment agreement, Blockbuster says.

"This revised employment agreement allows for management continuity and ample opportunity for an orderly succession by the end of the year,” says Antioco. “In the meantime, the board of directors, our management team and I remain focused on continuing to improve the business, most notably through Total Access."

Blockbuster Total Access gives online customers the option of returning DVDs through the mail or exchanging them at Blockbuster stores for free in-store movie rentals. The service was launched last year as an attempt to keep pace with Netflix, No. 21 in the Internet Retailer Top 500 Guide.

Blockbuster isn’t saying when the search for Antioco’s successor will begin. But it’s clear that a new CEO at Blockbuster will need to move quickly to gain ground on Netflix, which posted 2006 web sales of $996.7 million and is moving aggressively into the movie download business. Blockbuster had 2006 e-commerce revenue of $248.3 million.

Reed Hastings, co-founder and CEO of Netflix, is speaking at Internet Retailer Conference & Exhibition, June 4-7 in San Jose, delivering the Keynote Address on June 6.