Over the years, we’ve never ceased to be amazed about the creative names that companies come up with when it comes time to paying some of their top executives. Once upon a time, we used to keep a list of all the crazy names we’ve come across in the filings. On Tuesday, when Stanley Black & Decker filed its proxy statement, we learned about a new one: the synergy bonus.
Of course, we can’t even say the word synergy without thinking of the “Synergy speech” in the 2004 movie, “In Good Company.”
On page 20 of Tuesday’s proxy filing, the company disclosed that it paid former Chairman Nolan Archibald (he stepped down in March 2013) a $51.3 million synergy bonus. The bonus, the company helpfully points out, was “based on the annual run-rate of cost savings achieved by the Company as of March 12, 2013 that were attributable to the Merger. The cost savings were to be calculated on a pre-tax basis.”
To be fair, the company had previously disclosed in its filings that Archibald would receive a so-called “synergy bonus” when he retired, so Tuesday’s disclosure was just the culmination of something promised several years ago. But as best as we can tell, it never provided an estimate on what that figure would be.
Our friend, Gary Strauss at USA Today, provides a nice summary of some of Archibald’s other pay here and also pokes at the synergy bonus. Earlier on Tuesday, we also flagged the unusual bonus for subscribers to footnotedPro.
We’ve flagged Archibald before, mostly for his high-flying ways (see here and here, for example). As we noted at the time, Stanley didn’t have a plane when it acquired Black & Decker in March 2010. But as part of the merger agreement, Black & Decker’s plane, and specifically Archibald’s access to that plane for both business and personal use, was “grandfathered in”.
One other thing about that plane: during his 10 remaining weeks as Chairman, Archibald seems to have spent an unusual amount of time flying around. In Tuesday’s filing, the company said that the former executive spent $217,322 on personal use of the corporate jet for the 10 weeks of 2013 that he had access to the plane. In 2012, the number for the whole year was only $85K more, or $302,351.
As we footnoted a few weeks ago when we reported on Starbucks’ disclosure about its Chairman’s personal use of the corporate jet, it seems increasingly clear to us that some companies are using smoke and mirrors when it comes to reporting these personal jet usage numbers. With 2013 proxies starting to roll in now, we hope that the SEC will start paying closer attention to some of these obvious discrepancies too.
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