The golden years at Watts Water and Unit Corp. …

March 23, 2010

With the average 401K at just five digits, retirees are increasingly picking up part-time work to help make ends meet. Maybe some of them can find gigs like the ones landed by retirees Timothy P. Horne, King P. Kirchner and John G. Nikkel.

Horne, 72, retired from industrial and residential valve-maker Watts Water Technologies (WTS) at the end of 2002, after he had served as CEO of the North Andover, Massachusetts, company for 24 years and chairman for 16. Under his contract at the time, the company’s latest proxy tells us, he was on the hook to provide 300 to 500 hours of consulting to Watts Water “so long as he is physically able,” in return for a minimum of $400,000 a year. He is also eligible for secretarial services, an office at headquarters, retiree health-care, financial-planning services, auto-maintenance expenses and a club membership on the corporate dime. (He didn’t collect the car-care benefit.)

More than seven years on, that arrangement still stands, and last year the company paid him $495,564 — if you’re keeping score at home, that’s between $991.13 and hour and $1,651.88 an hour. (It’s also on top of his actual company pension, which paid $146,154 last year.)

In fact, the arrangement with Horne is to last “until the date of his death, subject to certain cost-of-living increases each year,” the company notes:

Our obligations to make the above-described payments to Mr. Horne and to provide the above-described benefits will not be affected or limited by Mr. Horne’s physical inability to provide consulting services to us if such disability should occur.

Should control of Watts Water change significantly, Horne needn’t rely on the good graces of the new bosses to stay gainfully employed. He can choose to take a lump sum payout instead. Just how much he would get depends on his age and various assumptions under the company’s pension plans, but it’s supposed to work out to the equivalent of $23,650 a month for life. For a man of Horne’s age and using the company’s pension-plan assumptions, that could be worth just shy of $4 million, estimates Peter Katt, a fee-only adviser who evaluates life-insurance and annuity contracts.

Nikkel, 75, and Kirchner, 82, both retired from Unit Corp. (UNT), an energy exploration and production company in Tulsa, Oklahoma. Kirchner co-founded the company and retired in May 2001; he got $560,000 in the first two years, plus monthly checks of $25,000 from mid-2003 through June last year. The total, according to the latest proxy: $2.4 million. Nikkel retired on April Fool’s Day in 2005 with a $70,000 annual consulting agreement that he and Unit have agreed to renew each year since then. (Next re-up date: April 1 this year.) A month after he stepped down, the company’s board voted to give him another $750,000 over two years.

The bottom line: For much of last year, Unit was paying three current or former CEOs. But at least the consulting advice is getting cheaper.

Image source: rdmrtnz via Flickr

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