If the top executives at Covidien decide to leave the company after a $43 billion acquisition by Medtronic goes through, they’ll do it under a golden parachute worth a collective $80 million, regulatory filings show.
The top 5 "named executives" at Covidien, led by chairman, president & CEO Joe Almeida, are in line for an average payout of some $16 million if they elect to depart after the deal’s consummation, slated for the end of this year or early next year.
And that’s apart from the holdings in Covidien stock the executives are expected to maintain (5 times base salary for Almeida and 3 times base salary for the other executives, according to the SEC filing).
In the case of Almeida, who pulled down $11.2 million in total compensation during fiscal 2013, that amounts to another $60.3 million worth of stock based on COV’s $72.02-per-share closing price June 13, the last trading day before the deal was announced. Almeida’s stake was worth some $73.9 million as of about 11 a.m. today, with COV shares up 1.6% to $88.16 apiece.
The "change in control" provisions are available to the top 5 named executives – Almeida, CFO Charles Dockendorff, medical device division president Bryan Hanson, developed markets president Peter Wehrly and chief counsel John Masterson – only if Covidien’s "double trigger" provisions are met: Involuntary termination or good reason resignation from 60 days before to 2 years after the deal closes, the filing shows.
Here’s how it breaks down for the Covidien executives if they meet the double-trigger standard, according to the filing:
| Cash severance | Bonus | Options | Stock | Other* | TOTAL | |
|---|---|---|---|---|---|---|
| Joe Almeida (CEO) | $7,368,899 | $1,605,718 | $8,486,833 | $19,721,566 | $83,535 | $37,266,551 |
| Charles Dockendorff (CFO) | $3,227,551 | $675,017 | $4,014,565 | $7,083,491 | $71,162 | $15,071,786 |
| Bryan Hanson (medical device president) | $2,120,633 | $585,184 | $2,215,926 | $5,547,939 | $71,162 | $10,540,844 |
| Peter Wehrly (developed markets president) | $2,085,739 | $426,713 | $1,792,588 | $4,914,991 | $71,162 | $9,291,193 |
| John Masterson (general counsel) | $2,327,370 | $472,288 | $1,778,693 | $3,117,830 | $71,162 | $7,767,343 |
| *Welfare benefits & outplacement | TOTAL: | $79,937,717 | ||||
