Retire and get a raise…

February 14, 2005

When they retire, most people see a fairly sharp decline in their income. But in some executive suites, retirement means a raise — a 50% raise in the case of one longtime executive at the Chicago Mercantile Exchange (CME) . The CME recently disclosed that when former chairman Leo Melamed steps down at some point in the future, he’ll receive $300,000 a year plus expenses for five years under a consulting agreement inked in January and disclosed in a recent 8-K. Granted, that’s not quite as lavish as Dick Grasso’s one-time deal with the NYSE. But it’s still 50% more than the $200K Melamed, who was 71 as of last year’s proxy, has been receiving in his role as senior policy advisor and chairman emeritus for the exchange, which went public in 2002. It’s not clear exactly when Melamed will step down — his board seat is valid through next year. But when he does, he’ll have something other than Social Security and presumably, a nice pension, to fall back on. Even sweeter? Once the five year contract expires, either Melamed or the CME can extend the agreement indefinitely.

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