… And other perks CEOs get when they lose their jobs.
Anyone who's ever been fired—or "resigned for 'personal reasons,' " as they say in the boardroom—knows that it's rarely a reason to celebrate. Most of us—and let's just say I have firsthand knowledge—are handed a box and allowed to collect our personal items as a security guard hovers nearby.
But some top executives are treated a bit more gently, even when their mistakes have cost shareholders hundreds of millions of dollars. We've all heard about the cash that cashiered executives get to keep. Over the past few weeks, there's been no shortage of stories about the $200 million-plus departure packages for failed CEOs Hank McKinnell of Pfizer and Bob Nardelli of Home Depot. The hefty paychecks must go a long way toward easing the pain of being shown the door, but top executives also seek other consolation. Departing executives help themselves to all kinds of swag, though the only evidence of it is usually buried deep in SEC filings.
When Sharper Image CEO Richard Thalheimer "departed" the company in late September, he took the 7-foot-tall Superman statue that used to stand in his office. In his separation agreement, filed on Dec. 29, Thalheimer agreed to pay half-price for the $5,000 Man of Steel statue and for a $15,000 statue of Star Wars' robot C-3PO—though few would argue that his leadership at the San Francisco-based retailer was superheroic. (Same-store sales were down sharply for much of last year, the stock declined by more than 40 percent in 2004 and 2005, and the company plans to restate earnings for the past three years because of questions about backdated options.) Despite this, Thalheimer will still be eligible for a 50 percent discount on all Sharper Image merchandise for the rest of his life. That's in addition to $5.7 million in severance and retirement pay.
Thalheimer isn't the only executive to ask for—and receive—office effects. In late July, Jacuzzi Brands CEO David Clarke stipulated in his retirement agreement that he would be able to take his "photographs of his personally owned sailboats" when he left at the end of August.
A month earlier, Mannatech's former chief legal officer Bettina Simon requested her office furniture—a desk, executive chair, and two side chairs—as part of her separation agreement. Office equipment—laptop computers, cell phones, and BlackBerries—are more common requests. Cars are popular, too, like the 2007 GMC Yukon that outgoing South Financial Group executive John DuBose recently asked for as part of his departure deal from the South Carolina-based bank. Former Varian Semiconductor executive John Aldeborgh requested a Porsche SUV when he left the company at the end of September. The two SUVs, which are respectively priced at $39,000 and $111,000, give new meaning to the phrase "getaway car." Some swag seems downright pedestrian, like the lifetime discount that former Kohl's executive Arlene Meier will receive now that she's retired from the Wisconsin-based retailer.
Perhaps my favorite farewell perk—certainly one that many execs will covet for themselves—is provided to retiring Anheuser Busch Chairman August Busch III: "draught beer services and packaged products to your residence." There's no better way to while away retirement (or forced unemployment) than sucking down a cold, frosty one from your backyard keg.
Michelle Leder writes a daily blog at www.footnoted.org that looks at SEC filings and is the author of Financial Fine Print: Uncovering a Company's True Value.