Free

A well-negotiated departure from CIGNA…

Executives often do a good job of negotiating cushy transitions from one chapter of their lives to the next (very likely with the help of crackerjack attorneys), so we’re not surprised when an executive who is also the general counsel gets a nice payout on his or her way out the door.

Such is the case for Carol Ann Petren, an Executive Vice President and General Counsel for CIGNA Corp. (CI), who advised the company April 27 that she would retire on July 1, 2011. Perhaps the company had an inkling of Petren’s plans, though, because – less than a week after Petren said she planned to leave – both sides had signed off on a multi-million-dollar Agreement and Release, which was filed along with this 8-K on May 3.

In exchange for Petren giving CIGNA a release and an agreement not to lure away its employees, go to work for a competitor, or say mean things about CIGNA, as well as her promise to stay mum on any confidential information she has, CIGNA is giving her a payout worth approximately $2.6 million.

Some of that money comes from a pro-rated payout from the management incentive plan, as well as pro-rated payments of her Strategic Performance Units (SPUs) and Strategic Performance Shares (SPS) – both of which are part of the company’s long-term incentive plan. It is also giving her “a cash payment in lieu of the value of unvested restricted stock she was previously granted,” which translates to CIGNA’s agreement to pay Petren a lump sum of $1 million “within 30 days after your Termination Date, but in no event later than March 15, 2012.”

The $2.6 million estimate that CIGNA attributes to Petren’s payout may turn out to be a slightly different number; the 8-K explains that’s because the actual value of some of the awards “…will be determined by the People Resources Committee in accordance with the terms of the CIGNA Long-Term Incentive Plan.” Petren will also get all the benefits which are already vested, such as the money in her pension, supplemental pension, her 401(k) and supplemental 401(k), and CIGNA’s deferred compensation plan. And the filing adds that any stock options Petren has “will vest upon her retirement and will expire at their original term.”

When combined with her pension (which CIGNA’s March 18 proxy valued at $750,000, although that assumed a Dec. 31, 2010 departure), Petren – approximately 57 years old, according to this source – should be set for a nice retirement and the wherewithal to pick up a new hobby or two.

Image source: Kelowna09 via flickr

_____

Over at FootnotedPro, we’re batting .300 with last week—s news that Lawson Software (LWSN) is being acquired in a $2 billion deal. Two other companies from our January 14 report on top M&A targets for 2011 have also announced deals: Smurfit-Stone Container (SSCC) and Pride International (PDE). FootnotedPro: Interesting. Actionable. Profitable.