We haven’t footnoted Northrop Grumman (NOC) enough to truly call it a frequent flyer, but when the giant defense contractor appears in these virtual pages, it’s usually a doozy. Most recently, there was the sweet retirement package for former Chairman and Chief Executive Ronald W. Sugar, with its $5,560-a-day consulting gig. And back in 2005, Michelle wrote about a departing chief financial officer who was clocking his third (lucrative) retirement at the ripe age of 51.
Now it’s moving expenses. Northrop Grumman is transferring its headquarters from sunny Los Angeles to considerably less glamorous Falls Church, Virginia, in the suburbs of Washington, D.C. (Surely it doesn’t hurt to move the company’s home base closer to its biggest customer: representatives of the U.S. taxpayer.) And, according to an 8-K the company filed late on Friday afternoon, CFO James F. Palmer is getting a check for $750,000 to make the move go a little more smoothly.
That’s not the standard relocation package, as it turns out. The company’s proxy laid out the standard package, which seemed generous enough to us:
“The relocation program provides financial assistance, professional services, and administrative support for the employee, spouse, or domestic partner and dependent family members during the time of transition. The program includes loss on sale assistance for employees who own their home, capped at $250,000.”
The company is also willing to pick up the tab for taxes on this benefit, it seems. And Northrop Grumman’s proxy helpfully notes that Palmer and CEO Wesley G. Bush were both eligible for the benefits at the time.
Instead, Palmer is giving up all that — and getting $750,000 cash instead, according to a minimalist confirmation letter filed with Friday’s 8-K. It’s hard to say just how much he would have gotten under the formal policy, but we doubt it would have been more than $750,000. After all, the policy (like most moving policies) tends to set maximums — if Palmer’s $750,000 move would have fit into the program, why cut a special deal?
For what it’s worth, it works out to a cool $280.16 per mile for the 2,677-mile move from the company’s current headquarters to Falls Church.
Palmer isn’t the only one who got a customized deal. Bush, the CEO, appears to have as well, but at least his arrangement is itemized in the proxy. In addition to moving his family’s stuff and up to two vehicles, the company was to buy his house, and in 2010 reimbursed him for $250,000 of loss on sale, plus $212,963 in taxes on the benefit.
He’ll also be reimbursed for “duplicate housing costs” for up to 60 days (and Bush has to pay the company for any time he spends in company-owned housing beyond 60 days). And his new home in Virginia got “enhancements … deemed necessary by the Company for his security” — which better include a fractional B-2 Bomber, or at least an actual moat with live alligators, because the bill came to $1.6 million. That’s not quite Las Vegas Sands territory (which clocked in at $2.54 million this year for Chairman and CEO Sheldon G. Adelson, and at $2.45 million last year), but it’s on par with what Amazon (AMZN) paid to keep Jeff Bezos safe.
In return for all that, Bush gave up other moving goodies, including
“expenses related to house hunting trips, new home purchase closing costs, temporary living assistance (lodging, meals, and rental vehicle).”
No doubt it’s missing out on the car-rental fees that’ll hurt.