So Much For CEO Pay Reform: Nolan D. Archibald Says "No" To $21 Million!
James Fenimore
By Dana Hedgpeth
Washington Post Staff Writer
Thursday, November 5, 2009
As head of Black & Decker for 24 years, Nolan D. Archibald was due a
little parachute in case of severance. When the Maryland power-tool
maker decided to merge with its rival Stanley Works this week,
Archibald was entitled to open it and float away with $20.5 million.
Instead, he turned it down.
Has a new age dawned in the realm of executive compensation? Maybe
yes, maybe no.
Under the merger deal, Stanley's chief executive, John F. Lundgren,
will be named chief executive of the combined company, which is
expected to have annual sales of $8.4 billion and about 40,000
employees. Such a change was enough to trigger Archibald's severance
payment.
Instead he apparently decided his new pay package would be quite
enough.
Although Archibald, 66, is stepping aside as president and chief
executive, he is staying on as executive chairman of the board of
directors. That requires going to board meetings and advising, not
running the day-to-day operations, analysts say. And it pays well.
For the next three years, Archibald is expected to earn $1.5 million a
year in base salary, according to filings with the Securities and
Exchange Commission. Plus, there's a bonus package of up to $1.9
million a year. There are stock options. And a "cost synergy bonus" --
which experts translate as reaching certain cost-cutting levels --
would pay him up to $45 million.
There's also a Black & Decker pension, worth $35.5 million, as well as
$15.7 million in a supplemental retirement savings plan. And he has
extensive stock holdings in Black & Decker.
Bottom line: Archibald will be well compensated.
Archibald declined to discuss his compensation, but Black & Decker
spokesman Roger Young said Wednesday, "He and the board agreed that
was appropriate. I don't think we need to get into all of the details
of how the conversation went. It is between him and the board."
Companies have become more and more sensitive about executive
compensation packages recently. The Obama administration has demanded
that companies that have received big government bailouts, including
American International Group, Bank of America and others, slash
compensation for their highest-paid executives.
"In this sort of market and economic environment, severance packages
are a real hot button for boards," said Patrick McGurn, an executive
compensation expert at RiskMetrics Group, an advisory firm.
Archibald, one of the longest tenured chief executives of a major
company, arrived at Black & Decker in the '80s, when the company was
struggling to keep its market share. Over the years, he turned the
company around by cutting costs, improving the quality of its products
and increasing sales, analysts said.
The Stanley merger is the biggest deal this year in the consumer
products sector. The 99-year-old Black & Decker, based in Towson, has
such brands as DeWalt, Kwikset and Price Pfister that will now join
with Mac Tools, Stanley Security Solutions and FatMax from the 166-
year-old Stanley Works, based in Connecticut.
Black & Decker's merger deal is expected to close in the first half of
2010. Both boards have approved the deal, which must still get
shareholder and regulatory approval. Archibald's compensation
agreement is "effective only upon consummation of the merger," the SEC
filing states.
http://www.washingtonpost.com/wp-dyn/content/article/2009/11/04/AR2009110404581.html?hpid=newswell
Dave C.
James Fenimore <slipu...@yahoo.com> wrote:
> "As Black & Decker chief steps aside, he declines golden parachute"
>
> By Dana Hedgpeth
> Washington Post Staff Writer
> Thursday, November 5, 2009
>
>
>
> As head of Black & Decker for 24 years, Nolan D. Archibald was due a
> little parachute in case of severance. When the Maryland power-tool
> maker decided to merge with its rival Stanley Works this week,
> Archibald was entitled to open it and float away with $20.5 million.
>
> Instead, he turned it down.
>
> Has a new age dawned in the realm of executive compensation? Maybe
> yes, maybe no.
>
> Under the merger deal, Stanley's chief executive, John F. Lundgren,
> will be named chief executive of the combined company, which is
> expected to have annual sales of $8.4 billion and about 40,000
> employees. Such a change was enough to trigger Archibald's severance
> payment.
>
> Instead he apparently decided his new pay package would be quite
> enough.
What was the point of this post, exactly? There's no interesting
information, and nothing at all that is remotely related to the
subject, "CEO Pay Reform".
People have been bitching about executives getting millions of dollars
after their corporations received billions of dollars from taxpayers.
Black and Decker didn't receive a bailout, and neither did Stanley. If
Archibald is making megabux, he deserves it for keeping his huge
corporation financially sound, so that the taxpayers aren't robbed of
even more money. -Dave