A serial retiree to study retirement…
Given everything else that was going on, you may have missed this press release put out by Marsh & McLennan (MMC) last week about their new Retirement Policy Center. In the press release, Marsh CEO Brian Duperreault said the decision to sponsor the center was “focused on increasing national awareness of a critical issue that needs attention… and broaden our reach to support the generation of ideas on retirement for the greater good of our aging population.” The press release also noted that M. Michele Burns, who had been the CEO of Mercer, would be leaving the company to head up the think-tank.
That announcement was last Tuesday. On Friday afternoon, Marsh filed an 8-K with both the press release and this agreement with Burns. To us, the only thing missing was the giant bow. Under the agreement, Burns, will continue to collect her Mercer base salary of $900K a year until the end of the year. After that, it drops to $850K. Burns will also get a $1.5 million bonus for 2011 (but none for 2012). The agreement also notes that Marsh will spend $650K to fund the center in 2012 (not including Burns’ salary) and $1.5m in 2013.
The filing is a bit vague on what happens in 2014 — presumably it will take longer than two years to study the various problems associated with retirement — noting “The Company may provide financial support in 2014 and later years at the discretion of the Chief Executive Officer of the Company.” Burns gets to choose where she’ll do this heavy thinking, though Marsh has to approve it (personally we’d go for Bali, where $850K can really go far). Marsh will also “provide support in the form of office space for you, a workstation for an administrative assistant, basic office services, communications and legal support”, the filing notes.
A quick breeze through the filings shows that this isn’t Burns’ first run at retirement. In 2005, Burns “retired” from Mirant, and received another plush package, according to this agreement. A year earlier — in 2004 — Burns “retired” from Delta Air Lines (DAL) and agreed to serve as a consultant for the next five years. While no money changed hands, Burns did manage to get “unlimited positive space travel” for herself, her partner and her dependent children for the rest of her life. (So the airfare to Bali would actually be free).
Keep in mind that while Burns may know something about retirement, she continues to sit on the boards of both Cisco (CSCO) and Wal-Mart Stores (WMT), where she makes close to $200K in cash compensation and collects several hundred thousand more in stock. According to Wal-Mart’s proxy, Burns is just 53, significantly younger than most of the retirees she’ll presumably be studying. In fact, a recent OECD study found that the average retirement income for Americans is just above $40K a year — considerably less than Burns’ retirement package. And the retirement age to get full Social Security benefits is now 67.