You've probably seen the hip show on E! television. It always starts with "It's Good to Be...."
From Donald Trump to Britney Spears, you get to see how the other half lives -- the jets, the yachts, sprawling mansions, chic clothes, exotic hideaways, and so much more.
Well, perhaps Phil Purcell, the recently deposed CEO of Morgan Stanley (NYSE:MWD), should have his own profile on the popular show. Thanks to his recent buyout package, he can certainly live the high life.
Let's take a look at the ka-ching: First, there is a "bonus" payment of $43.9 million. This is certainly ironic; after all, isn't a bonus for someone who does a good job?
A group of former high-powered Morgan executives had issues with Purcell's job performance and even waged an intense PR campaign to force him out. His critics had a litany of complaints: the subpar performance of Morgan's stock since 2000 -- especially relative to its peers, such as Goldman Sachs (NYSE:GS) and Lehman Brothers (NYSE:LEH); problems with the integration of the 1997 merger with Dean Witter; and the departure of key employees, such as uber-dealmaker Joseph Perella.
Actually, Purcell's exit package has some other goodies. He will get $250,000 per year for the rest of his life. Morgan will also contribute $250,000 per year to Purcell's charity. Other lifetime perks include secretaries and an office.
Keep in mind that this is severance; that is, it does not include the wealth he has built by being CEO. For this, he has equity awards of $51.3 million and a pension that will likely pay in excess of $1 million per year.
OK, Purcell will not be able to collect his compensation if he decides to work for another financial-services firm. But then, I'm not sure he's an altogether attractive candidate, given his history at Morgan Stanley.
Actually, Purcell's posse will also get lucrative deals. There is Stephen Crawford, whom Purcell named as co-president, sparking the loss of key employees. He gets guaranteed compensation of $16 million for 2005 and 2006. And, if he leaves by Aug. 3, he'll get $32 million. Yes, it's also good to be Stephen Crawford.
And the firm's CFO, David Sidwell, is guaranteed a compensation package of $10.5 million.
It's interesting to note the terms of the pay package Morgan announced a few days earlier for the incoming CEO, John Mack. He'll get an upfront grant of $27 million in Morgan stock. As for cash, he'll get a minimum of $25 million per year (it's a five year contract).
Predictably, this erupted into a PR fiasco. And on Friday, Mack said he would "amend" his contract. He said he will let the board set his compensation based only on performance of the firm. But hasn't the board done enough damage -- in the form of exorbitant exit benefits to Purcell and crew?
Fool contributor Tom Taulli does not own shares mentioned in this article.
