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Man Ellen Pao accused of retaliation had bonus docked

Elizabeth Weise

USA TODAY

Ellen Pao leaves the Civic Center Courthouse during a lunch break in her trial on Feb. 24, 2015, in San Francisco.

SAN FRANCISCO — The man Ellen Pao has accused of retaliating against her after their affair ended had part of his yearly bonus at the venture capital firm Kleiner Perkins docked because of the affair.

The punishment was another detail that came out in San Francisco Superior Court on Monday, on day five of the hotly followed Ellen Pao v. Kleiner Perkins gender-bias case.

Pao is suing the well-known venture capital firm for $16 million, citing gender bias and retaliation. She left in 2012 and is now interim CEO at Reddit, a popular news aggregation site.

Raymond Lane, a partner emeritus at the firm, testified in court Monday that Ajit Nazre lost out on part of his bonus in 2008 because of the incident.

Nazre was a junior and later senior partner at Kleiner who had a brief, consensual relationship with Pao. It ended in 2006 after she found out that he was not in fact separated from his wife as he had told her.

In her complaint, Pao alleges that Nazre began "a consistent pattern of retaliation" against her after their relationship ended, keeping her out of important e-mail loops and not telling her about meetings.

What hadn't been revealed before was that the affair affected Nazre economically at the time.

In 2007, the general partners at the firm sent Nazre a letter outlining how much the incident had affected his stature at the firm.

The letter read in part, "We were very disappointed with the personal situation that developed with Ellen over the past year. It was a serious lapse of judgment on your part as a professional, and a married individual."

It continued, "This situation has diminished what otherwise would have been a stellar year for you. It will take time to earn trust and put this mistake in the past."

Because of the issue, the board decreased Nazre's bonus for 2007, though apparently not his overall salary, Lane said.

Numbers were not included in the letter and Lane would not confirm how much of his yearly bonus Nazre was docked.

In previous testimony in court, bonuses for junior partners appeared to be in the $100,000 or so range, though the figure seems highly variable depending on the individual and how their year had gone.

One of Pao's lawyers, Alan Exelrod, asked Lane, "Wasn't the penalty $22,000?" but Lane did not confirm that figure.

Nazre eventually was fired in 2011 after he made a pass at another Kleiner partner, Trae Vassallo. In that instance, she testified in court last week, he created a fictitious dinner meeting with an important client so he could have dinner alone with her.

After the dinner, he arrived at her hotel room door in a bathrobe and slippers, asking to be let in. "I believe he was carrying a glass of wine or something like that," Lane said Monday.

"She told him very directly that she was not interested and she was not appreciative of his advances," Lane said.

Other questions that came up in court on Monday included whether female junior partners at Kleiner were allowed to join only one board per year while male partners were allowed to join multiple boards, and whether "cocky" is a positive or negative attribute in a venture capitalist.

In court, Exelrod showed a document listing the number of boards that Kleiner partners sat on. Venture capitalists typically sit on the boards of companies that the firm has invested in, to provide support and leadership.

One of the allegations in Pao's suit is that female junior partners were restricted to taking on only one new board seat a year while male junior partners sat on many more.

Sitting on boards gives partners contacts, knowledge and the ability to strengthen their skills, all crucial to advancing to much more remunerative senior partner positions.

As he questioned Kleiner general partner Ted Schlein, Exelrod listed several male junior partners who began at the firm around the same time as Pao. These men sat on multiple boards in the mid-2000s, some as many as six.

Exelrod contrasted that with Pao and Vassallo, both of whom were appointed to no more than one board a year, only slowly building to more.

Kleiner Perkins lead lawyer Lynne Hermle noted that some of those board seats were actually junior partners acting as backup for senior partners who were also on the board, or junior partners who were there as board observers.

Schlein was also asked about a comment he made questioning whether being "cocky" is a necessary attribute for being a venture capitalist.

After a morning's worth of questioning, Judge Harold Kahn gave jurors the chance to submit questions to Schlein. One of those was about the distinction between "cocky" and "confident" when it comes to people who work as VCs.

"I think if you are cocky and by the time you're done talking with somebody they don't like you, that wouldn't be good. If you have confidence in yourself that may border on cockiness, but by the end of the conversation the person feels they have connected with you and they think truly know whence you come," then it's not cocky, he said.