When most corporate employees leave their jobs, it means the end of the paycheck.
But many executives at the top of the corporate ranks leave with a golden parachute, enabling them to live comfortably regardless of their reasons for leaving. Just check out the list below of Top 10 CEO severance packages.
One executive you won't see on the list: Groupon Inc. (NYSE: GRPN) embattled former CEO Andrew Mason. While the news of Mason's firing wasn't too shocking, what was surprising is the $378.36 retirement package he walked away with.
That's not a typo.
According to CNBC, in regulatory filings Groupon outlined that if Mason should leave the company, he'd receive six months' salary and healthcare coverage.
Indeed, his base annual salary was $756.72
There's no reason to feel bad for this 32-year-old music major. At Groupon's share price, his net worth is about $200 million.
Mason's news followed earlier reports that same week about a potential exit package for H.J. Heinz Co. (NYSE: HNZ) CEO William Johnson.
His departure has not been confirmed but he could leave soon when the new buyers of Heinz take over. And he may do so with a nice chunk of change.
Estimated at $200 million-plus, his exit package can be broken down as the following, according to a Securities and Exchange Commission filing: a $56 million "golden parachute" with bonus and payments, $57 million from pension and deferred compensation and $97 million in Heinz shares that he either owns or controls.
Why such a hefty amount?
A Heinz spokesman said to The Wall Street Journal, "The payments reflect Mr. Johnson's success in creating billions of dollars in shareholder value over his successful 15-year tenure as president and CEO. This success includes delivering total shareholder returns of 177% since 2006 and the 19% premium to Heinz's all-time high share price that all Heinz shareholders will receive in the merger."
He added that some compensation reflects the equity Johnson earned during his 30 years at Heinz.
While that sounds like a lot, compared with other CEOs, he's in the middle of the pack.
In a 2012 study, research and advocacy firm Governance Metrics International compiled a list of the 10 largest U.S. CEO payouts over the past decade.
From this list, six CEOs left office with packages valued at more than $200 million, and four who left with $100 million-plus in severance pay came from the healthcare industry.
In total, 21 CEOs received severance packages worth more than $100 million over the course of the decade, according to GMI. Total compensation, including bonuses and salaries and stock options, was nearly $4 billion.
That's why many CEOs left behind angry shareholders, who felt that most of these packages could have been much better spent.
So who is part of the Top 10 List?
Top 10 CEO Severance Packages
Take a look. (The list could change with the addition of Heinz's Johnson.)
- Jack Welch, General Electric Co. (NYSE: GE), 2001: After about 20 years at the helm, and being named "Manager of the Century" by Fortune magazine in 1999, Welch left GE with a "walkaway" package of about $417 million.
- Lee Raymond, Exxon Mobil Corp. (NYSE: XOM), 2005: Raymond became CEO of Exxon in 1993 and led ExxonMobil from 1999-2005. When he left, he reportedly received a $321 million retirement package that included salary, bonuses and stock options.
- William McGuire, UnitedHealth Group Inc. (NYSE: UNH), 2006: McGuire became CEO in 1991. He left amid scandal in 2006 when the U.S. Securities and Exchange Commission started investigating the company for options backdating. McGuire received $286 million in his retirement deal, but later had to pay more than $600 million in settlements with the SEC and shareholders.
- Edward Whitacre, AT&T Inc. (NYSE: T), 2007: Whitacre received $230 million when he left after 17 years in charge. After his retirement, he still used company cars, corporate aircraft and support staff.
- Bob Nardelli, The Home Depot Inc. (NYSE: HD), 2007: Nardelli received $223 million ($100 million in perks and severance) when he stepped down after the board asked him to more closely tie his compensation to shareholder gains, which had been stagnant compared with Nardelli's $131 million per year.
- John Kanas, North Fork Bank, 2006: Kanas walked away with $214 million in total retirement and severance. North Fork Bank became part of Capital One in 2008.
- Fred Hassan, Merck & Co. Inc. (NYSE: MRK), 2009: Hassan got $189 million, including a $98 million pension package.
- Louis Gerstner, International Business Machines Corp. (NYSE: IBM), 2002: Gerstner is credited with preventing IBM from going out of business in the early 1990s. He received $189 million when he stepped down in 2002.
- Hank McKinnell, Pfizer Inc. (NYSE: PFE), 2006: When he left Pfizer, McKinnell received $188 million, which included a $161 million pension package. The company's 2006 annual meeting included a shareholder-sponsored publicity stunt of an airplane flying over the meeting with the banner, "Give it Back, Hank!"
- Thomas Ryan, CVS Caremark Corp. (NYSE: CVS), 2011: Ryan finishes the list with his $185 million in severance pay.
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