Golden parachutes for BE Aerospace execs to total $87 million


Six top executives of BE Aerospace stand to receive $87.4 million in golden parachute payments if the company’s proposed merger with Rockwell Collins is completed.

Iowa-based Rockwell Collins said last year it would pay $6 billion for Wellington-based BE Aerospace (Nasdaq: BEAV), a 22 percent premium to its market value at the time.

According to a regulatory filing last week, BE Aerospace Executive Chairman Amin Khoury would receive $32.4 million, including $16.5 million in cash and $15.9 million in stock. Chief Executive Werner Lieberherr would get $29.1 million, including $12.6 million in cash and $16.4 million in stock.

BE Aerospace’s golden parachutes eclipse the $85 million promised to Office Depot’s management team if the Staples deal had closed. (The merger was blocked by federal regulators.)

Both are chump change compared to the hundreds of millions of dollars collected by Jarden Corp. executives when they sold their Boca Raton company to Newell Rubbermaid. Chairman Martin Franklin collected $180 million, thought to be a record golden parachute.

Golden parachutes were created to nudge CEOs to negotiate mergers that are in the best interests of shareholders. A CEO might balk at doing a deal that eliminates his job, and a golden parachute can soften the blow. But corporate governance types fret that golden parachutes have grown so luxurious that they skew CEOs’ decisions in the opposite direction.


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