Getting perky at General Dynamics__»

March 22, 2010

When CEOs retire, they often get a slew of perks beyond the pensions and deferred-compensation they have accumulated while at the helm — from small (home office equipment, like computers and cell phones) to large (years’ worth of office space and secretarial support, and barely used luxury cars) to very large (free rides on the corporate jet for years to come).

It’s hard to put a dollar value on that kind of thing. Once the execs retire and cease being “named executive officers” under SEC reporting rules, the cost of those perks often fades out of the annual proxy. Now, however, the retirement of 67-year-old Nicholas D. Chabraja from General Dynamics (GD), after 12 years in the top job, gives us a glimpse of the price-tag for those incidentals of the executive golden years: $8.9 million, according to the proxy it filed on Friday.

That’s because General Dynamics shelled out the value of Chabraja’s perks in advance: office support, administrative support, reimbursement for moving expenses, and “applicable tax gross-up to which he was entitled under his amended and restated employment agreement dated June 7, 2007” — and, of course, “future use of corporate aircraft.”

Keep in mind, that’s the price-tag for the perks alone; Chabraja also got $1.59 million in pension and deferred-comp payouts last year (as well as $269,231 in unused vacation time), with another $18.6 million early this year. There was also a $3 million donation to Northwestern University made in Chabraja’s name. And he got $5.2 million in salary and bonus for the six months he spent in the top spot, plus $700,000 in cash, stock and options for serving the second half of the year as non-executive chairman. Plus, restrictions expire on stock valued at $8.3 million.

Once the zeros start adding up, it’s hard to keep much perspective. Here’s a yardstick: $8.9 million is enough to pay the full premium for workplace health-insurance coverage for 665 families for a year.

It also happens to be enough for the $8.5 million contract Chabraja signed in January with General Dynamics’ Gulfstream Aerospace unit to buy his own “mid-sized pre-owned aircraft.”

Happy flying!


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