November 11, 2011
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The payroll list goes on
We touched upon five companies above, but they're certainly not the only companies with well-paid departing CEOs. Besides Home Depot's (NYSE: HD ) Robert Nardelli, Pfizer was flirting with the $200 million mark when CEO Hank McKinnell was replaced in 2006. And while the economy and stocks were slumping during the recent financial crisis, CEOs from companies like Citigroup (NYSE: C ) , Bank of America (NYSE: BAC ) , and General Motors (NYSE: GM ) were collecting hefty severance packages and/or retirement benefits while requesting bailouts. Hewlett-Packard (NYSE: HPQ ) might clinch the medal for repeat offenders, having worked its way through three CEOs over the past six years. Estimated payouts across its three former CEOs -- Leo Apotheker, Mark Hurd, and Carly Fiorina -- total over $75 million.
But other public companies have learned their lesson by now, right? Think again. Just last month, Nabors Industries announced that Eugene Isenberg would step down as CEO and become president. Besides holding the president title, Isenberg will be walking away with $100 million in cash yet remain the chairman of the board. That $100 million seems excessive given the company's third-quarter net income of $74.3 million. In August, Bank of New York Mellon announced it was sending off its CEO with a payoff that could amount to almost $34 million.
Bottom line: Executive payouts can be expensive for a company and its shareholders. Not to mention, anger shareholders and consumers alike. Take steps to ensure that you're investing in companies that are aligned with shareholder interests.
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