Former TSR CEO files $1 million lawsuit over severance pay

The former chief executive of TSR Inc. has filed a lawsuit for more than $1 million, charging that the computer staffing company terminated him to avoid payments required under his severance agreement.

Christopher Hughes filed the lawsuit earlier this month in state Supreme Court in Manhattan, maintaining that he gave notice for “good reason” in a resignation letter dated  March 2 and was entitled to the payments equal to twice his $400,000 base salary and twice his bonus for the fiscal year.

“I’m looking for what I’m owed,” Hughes said in an interview.

The executive’s exit and lawsuit cap a long-running corporate drama involving the sale of stock by Hughes’ parents, a proxy fight and a corporate takeover by a group of insurgent shareholders.

John Sharkey, TSR's chief financial officer, said the company, a provider of computer programming services, would have no comment on the lawsuit.

Thomas Salerno was named president, chief executive and treasurer of the Hauppauge company effective March 23.

Salerno, who had served as managing director of the company’s IT consulting subsidiary, had been serving as acting CEO since Jan. 27, the company said.

The lawsuit seeks damages of at least $1 million plus interest, costs and legal fees.

In a government filing, TSR said it provided oral and written notice at the end of February that Hughes was terminated for “cause” under his employment agreement.

Shareholders who held almost half of all TSR shares took control of the company's board of directors when the incumbent management failed to meet a Dec. 30 deadline to buy out the dissidents’ stock holdings for $5.96 million, or $6.25 per share.

At that time, TSR chairman Hughes and four allied directors resigned from the board of directors, but Hughes continued as CEO.

Hughes took over as CEO after the retirement of Joseph Hughes, his father and the company’s founder, in July 2017.

But in June 2018, Christopher Hughes’ parents, Winifred and Joseph Hughes, requested that TSR be sold in a letter sent on their behalf by another son, James Hughes.

The following month, Joseph and Winifred Hughes sold their 41.8% stake in TSR to the shareholders who later mounted a proxy fight against Christopher Hughes and eventually took over the company.

By Ken Schachter

kenneth.schachter@newsday.comkschach

Ken Schachter covers corporate news, including technology and aerospace, and other business topics for Newsday. He has also worked at The Miami Herald and The Jerusalem Post.