Call it what you will, a handshake or a parachute; the result is all the same. The rest of us just get elbow out of the way as we get pushed through the back door. The top executives leave by the front door and to boot they hop into a chauffeur-driven car (paid by the company, of course) as they drive off into the sunset. To parachute someone: send them elsewhere, relocate them, bundle them off, pack them off or dispatch. But, one essential thing is missing from that definition. When they get bundled off, they also get bundles of dosh in the process and that’s regardless of whether or not they have done a good job. It really is amazing how in some jobs at the very heights of companies the sum make you go dizzy. There is nobody else that gets a pay-out quite like a golden handshake. In the real world people don’t get paid loads of money when they get the push. They just join the dole queue. Why can’t the top executives that get shown the exit door do the same as the rest of the unemployed people in the country? Why do they have to get a soft landing when the rest of us come down with a damn big thud, crashing to the ground?
There are sums of money that are dished out to top executives that would make you come out in a sweat they are so obscenely huge. But, who got the most and when did they get it? Here’s the list of the biggest golden handshakes in history.
1. Carly Sneed Fiorina
$21 million + $19 million in stock
Fiorina is small-fry in terms of the pay-out. But, she is the only woman in the list! She was the Chief Executive Officer of Hewlett-Packard until 2005 when she was asked to leave. Under regulations, no leaving executive was supposed to get 2.99 times their base salary. Fiorina’s pay-out was much more than that and there should have been shareholder approval before it was given to her. But, it was never obtained. Wonder why? Any suggestions? Shareholders took Hewlett-Packard to court but they lost. The case was dismissed in April 2008. Fiorina went on to work for Fox Business Network and also as advisor to John McCain during the Presidentials. She lost her attempt to become a Senator in 2010.
2. Frederick Ross Johnson
Johnson was the Chief Executive Officer of RJR Nabisco. He was posted on the front page of Time magazine under the headline “A Game of Greed: This man could pocket $100 million from the largest corporate takeover in history. Has the buyout craze gone too far?”
He only got $53 million in the end when he left in 1989. At that time he was listed as the biggest golden handshake of history. How far is that from the truth today! He’s down at the bottom of the list today. On and up?
3. Henry McKinnell
McKinnell was the Chief Executive Officer of Pfizer Inc. until 2006. He gave himself a controversial pay rise which increased his basic salary by 72% in 2005, even though stock of the company was rapidly declining at the time. It lost 46% of its value while he was CEO of the company. That didn’t stop the pay-out, however. He was replaced by Jeff Kindler when he left the company on July 28th 2006. Many have criticized McKinnell’s dilution of shares through stock-for-stock acquisitions. His base salary in 2005 was $2, 270, 500, which came with a bonus of $3, 700, 000 and $5.5 million in incentive bonuses. He was greatly criticized for the increase in salary and the pay-out when he left the company. But, he staunchly defended himself saying that he deserved every cent of the money. He is currently a director on the boards of ExxonMobil and Moody’s. So, there is a life after being made redundant, isn’t there? Why do people worry (I wonder)? These guys just walk out of one and into another.
4. Charles Prince
$99 million in stock
Talk about charm pricing. Was that for the marketing people to make him look good? They really should have gone the whole hog. If you are talking in millions, there’s no point in psychologically duping the on-lookers. Make it a round figure at $100 million, we won’t think anything less of you! Prince stepped down from Citigroup Inc. in 2007following the enormous debts that the company had incurred during the sub-prime crisis. He also had a chauffeur and a car paid for (for 5 years). Damn, that ended last year. Wonder if anyone has seen him on a bus or something lately. Fortune stated that he was one of the people that never saw the crisis coming. Where was he?
5. Stanley O’Neal
O’Neal was the Chief Executive Officer of Merrill Lynch & Co. Inc. He retired from that position in 2007. Just a shame that at the same time the company decided to pay out those millions it also incurred financial losses to the value of $8 billion. Oh well, what’s a few million when we are talking billions? They also got a fine of$8.4 million due to their involvement in the subprime crisis. He is now serving on the board of directors of Alcoa. CNBC listed him as one of the worst CEOs in history! He is accused of having been one of the people that were responsible for the financial crisis in 2007.
6. James Kilts
$165 million + $13 million in stock
Kilts was the Chief Executive Officer of Gillette Co. The position that he held was taken away mechanically-speaking when the company was taken over byProcter & Gamble in 2005 (for the sum of $57 billion). While he was CEO of the company he had a salary of$6.5 million a year. Just a shame that so much money was paid out to one man, when there were some 6, 000 people that lost their jobs through the merger. I wonder if they got anything even remotely near the money that Kilts received.
7. Michael Ovitz
$38 million + $131 million in stock
In Ovitz’s severance clause in the contract he signed with the Walt Disney Companyin 1995, it stated that he would get a pay-out of $130 million in the event of being kicked out. Who has that much luck in real-life? He was the President of Disney under the Chairman Michael Eisner (who we will get to later down the list). Shareholders were far from happy that the company had decided to take someone on and then get rid of him so soon afterwards (14 months) and they filed a lawsuit against the company claiming that the money should be paid back. The court ruled that Ovitz was given the stock options and pay as an incentive to work for the company and not as severance pay. It upheld the pay-out. He kept the money.
8. Angelo Mozilo
$44 million + $140 million in stock
The last guy to be in the millions, before we move on to the serious stuff of billions. Mozilo was the Chief Executive Officer of Countrywide Financial Corp. He certainly turned a small company into a nationwide business that ended up becoming one of the largest mortgage providers in the USA at the time. Except, it all happened just prior to thesubprime crisis and the subsequent stock-market crash and ensuing financial crisis around the globe. The company was taken over by the Bank of America Corp. That meant that Mozilo was able to net his millions and leave the company on July 1st 2008. Strange how the stock options that he had were sold off entirely in 2006 just prior to the bubble bursting. Insider dealing? No, can’t be possible. People don’t do that, do they? Well, he was charged by the Securities and Exchange Commission on June 4th 2009 for it along with securities fraud. He ended up with a fine of $67.5 million and a lifetime ban from the directorship or officer on a public company. Between 2001 and 2006 he had a combined salary, bonus and stock valued at nearly $470 million. He was called before the United States Committee on Oversight and Government Reform. Mozilo is a wanted man anyhow. Time magazine listed him as one of the top people to blame for the financial crisis! Guilty maybe. Rich definitely!
9. Michael Eisner
Eisner was the Chief Executive Officer of the Walt Disney Company until 2005. While he was the CEO for more than two decades he transformed the company by adding 7 theme parks (while they originally only had 4). He also launched 10 cable channels in the US and took over ABC broadcast network. Stock price increased 1, 646%! Employees shot up from 28, 000 to 129, 000. The reason why he got the push? Simply due to the fact that he clashed with Roy E. Disney and Stanley P. Gold (two former directors), who stated that he constantly had issues with employees and partners of the company.
10. William McGuire
$1.6 billion in stock
Now, McGuire is the biggest pay-out in this list. The guy that could have retired twenty times over and still had enough to live on for future generations. He had been the Chief Executive Officer ofUnitedHealth Group Inc. for 15 years until 2006. Admittedly, he got the money in stock options, but all the same he did actually get it all (for a while). When he joined the company it had revenue amounting to about $400 million. By the time he left it was raking in $70 billion. He was asked to step down in a growing crisis with the Securities and Exchange Commission that was carrying out an investigation on McGuire. He, as well as other directors, had apparently backdated stock options. The price of the options was lower on the date that was chosen and they were subsequently able to sell them off and make a killing. He was given the $1.6 billion in stock options when he left but was not allowed to sell them while the investigation was going on. In 2007, the SEC stated that he had to pay back$468 million and he was fined $7 million. He was not allowed to serve as a director of a public company for ten years. Not long to go then, before he is back on the scene.
Just some food for thought at the moment given the present climate on the employment scene. The stakes are far from high when we are talking about the unemployment benefit of the average person in the USA, for example. YourWeekly Benefit Rate (WBR) will be 60% of the average weekly earnings for the base-year period. But, there’s also a catch. It’s maximum $624 at the moment regardless of how much you earned before. You can always try to bump that up with Dependency Benefits. Oh, forgot to say also: you can only collect that for 26 weeks maximum also. Hardly anything to write home about, is it? Anyhow, you wouldn’t be able to buy a stamp to send the letter let alone pay an internet connection to send a mail. Unemployment currently stands at 7.6% in the USA. That’s 11, 777, 000, up 17, 000 in June 2013. Let’s imagine just for one moment that all of those people were able to claim $624, the maximum amount allowed in the country. That would work out to a pay-out of $7, 348, 848, 000.
Who’s worth it: the guys above or these guys on the dole?
Originally posted: Biggest Golden Handshakes in History