Human Capital & Careers

Summer Severance Packages Are Blockbusters

But not all former executives got all they sought.
Stephen TaubAugust 10, 2004

Over the last month, compensation committees at three large-cap companies have either agreed to or been ordered to pay out multi-million dollar packages to former senior executives. There’s one note of consolation for shareholders: not all the former employees received the full amount they sought.

For example, former Dynegy Inc. CEO Chuck Watson, received $22 million as a result of an arbitration settlement. The one-time energy company chief had been seeking $28.7 million in the dispute with his former employer.

In addition, former Dynegy president Steve Bergstrom received a $10.4 million settlement – every dollar he sought — plus attorneys’ fees and interest. In November, former CFO Rob Doty will try his hand at the mediation process. Doty is seeking to collect $3.4 million worth of severance from Dynegy.

Meanwhile, the Coca-Cola Company’s compensation committee agreed to waive grant-period limits on 200,000 shares of restricted stock, and release the shares to newly retired former chairman and CEO Douglas Daft. Daft will receive the shares, which are worth $8.8 million, when he turns 62in March.

The Coca-Cola compensation committee decided to release the shares in recognition of Daft’s 27 years of service with the beverage giant. As part of the pact with Coke, Daft agreed to forfeit 500,000 shares of restricted stock granted to him in November 2000. In addition, Daft will forfeit one million shares of performance-based restricted stock.

Finally, officials at State Street Corp. awarded former chief executive David Spina $12 million in salary and other compensation after he retired at the end of June, Reuters reported. According to Spina, his retirement decision was prompted by a reevaluation of his personal priorities after undergoing heart surgery last year.