Which parachute is the most golden?

The "walk-away" package is an increasingly expectation among corporate executives in the US at least. It isn't the gold parachute of old, structures put in place to give a CEO protection in case he was ousted in a hostile takeover bid. Nor is it the payment for failure, a way to pushing the executive less reluctantly out the door, with a payment for silence. The walk-away is something different. It sudden grew in prominence after Jack Welch retired from General Electric and subsequent his divorce settlement forced into public view his perquisites valued at $2.5 million a year. According to a report by the proxy researchers at GMI, since then, multi-million dollar severance and other separation packages have become so commonplace that we scarcely notice them. Recent HP parted company with CEO Leo Apotheker and with $12 million, with hardly a mention. Companies now accelerate equity awards along with substantial pensions and other deferred compensation all but guarantee significant payouts at many of the largest US corporations. GMI has published a report going back to 2000 to examine the largest golden parachutes and other termination packages of the past decade, many of which have never been quantified before. Here are some of the highlights:

• The top 21: Some 21 CEOs received walk-away packages in excess of $100 million since 2000.
• The top awards: Walk-away packages include actual and potential stock option profits, full-value stock awards, continuing salary and bonus payments, health care benefit and continuing perks, additional pension benefit.

Among the cases involved, the tenure of the CEOs ranged from nine months for Viacom's Thomas Freston to 29 years for North Fork Bank's John Kanas, with both extremes raising questions about what justified the additional payments. Perhaps most surprising were the cases of three CEOs who received payouts without ever leaving.

Source document: The GMI report is a 10-page pdf file.