Another expensive babysitter…

May 16, 2006

Last September, I wrote about Con-Agra’s (CAG) sweetheart deal with outgoing Chairman and CEO Bruce Rohde that will pay him $50K a month through 2009, despite the fact that Con-Agra stock didn’t exactly sparkle under Rohde’s leadership. Well, late yesterday, Bowater (BOW) disclosed a nearly identical deal with its outgoing Chairman and CEO, Arnold Nemirow in this 8-K filed late yesterday. The details of the deal with Nemirow were buried in an 8-K that included all sorts of other things, including changes to Bowater’s retirement and pension plans.

Like Rohde, Nemirow will receive $50K a month through 2008 to babysit David J. Paterson, a veteran paper industry executive and Bowater’s newly named president and CEO. Though the 8-K doesn’t spell out all of the terms of the deal, it does note that if Bowater is acquired, Nemirow will collect three times his consulting fee plus a tax gross-up. Office space — a fairly standard-issue perk for outgoing chairmen these days — is not spelled out. Nemirow will remain as non-executive Chairman through the end of this year, but starting in January, he’ll only be consulting. And like Con-Agra, Bowater’s performance under Nemirow’s leadership — he’s been CEO since 1995 — has largely been lackluster too.

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