Comments on: On Black and Decker’s CEO and unicorns…

By: Michelle Leder

Michelle Leder — Fri, 06 Nov 2009 14:40:09 +0000

@Ralph: I don’t mean to imply that Archibald is some kind of hero or that he’ll be poorly compensated for what can charitably be called a half-baked job. Still, when you compare his take to some of the other CEOs I’ve written about over the years — I’m thinking of John Kanas at Northfork or Jim Kilts from Gillette specifically here, but there’s certainly other examples too — Arhibald does compare favorably.

@Broc: Thanks for cross-posting that comment.

I’m still interested in why there would be a new contract with the severance clause signed on the same day the deal was announced.

By: Broc Romanek

Broc Romanek — Fri, 06 Nov 2009 14:21:49 +0000

I blogged on this in my DealLawyers.com blog and got this response (which I added to my blog) from one of our members: I don't mean to throw stones, but Mr. Archibald is 66 years old. Why is he entitled to three years of severance in the first place? Based on my review of his new three year Executive Chairman Agreement, he is entitled to a base salary of $1.5 million per year, a target bonus of $1.875 million per year and long-term incentives of $6.65 million per year, (of which 50% is in stock options and 50% in restricted stock). Add to that, a 1 million share “sign-on” stock option grant (estimated value $15 million) and a Synergy Bonus Amount of as much as $45 million. All in, he could earn $90 million over the next three years, which would easily make up for his contract waiver if the company performs. It is also worth noting that his current SERP is worth $35 million as of December 31, 2008, and he retained the right to an enhanced SERP if he is terminated before the end of the new contract term (i.e., he gets additional years of service and his foregone severance is included in the benefit calculation). While I am glad to see a CEO waiving severance, it looks to me like he is getting it back, and then some.

By: ralph

ralph — Fri, 06 Nov 2009 10:56:20 +0000

he wants to retire and get his money out. that’s why he has arranged this ridiculours merger. let’s remember people he’s getting a 22% premium on his B&D stock.

By: Michelle Leder

Michelle Leder — Thu, 05 Nov 2009 19:14:01 +0000

@Richard: That’s a good point. Wonder if any lawyers who read footnoted regularly would care to weigh in here on why there was a new contract on the very same day the deal was announced.

By: RICHARD

RICHARD — Thu, 05 Nov 2009 18:57:28 +0000

If he is waiving his opportunity to the pile of cash and the gross up, then why is it in the agreement other than to highlight what a jolly decent chap he is. Perhaps it could be filed under that well known game show ending – “here’s what you would have got”?