Recruiting top talent often comes at a price, and for publicly traded companies that price is often spelled out in the language of an employment agreement. The latest research from The Corporate Library shows that many of the largest severance payouts of the last couple years were issued during the financial crisis, as CEOs were able to part with sizeable checks from terms agreed to years earlier. In some cases however, the term “years” can be used very loosely. Many of these contracts contain tax gross-ups or other special perks, guaranteed equity grants, and other provisions which clearly benefit the CEO, but are lacking in terms of providing shareholders with any additional value. Though current severance packages do not often produce the eye popping dollar figures of just a few years ago, there is still significance in what these payments represent and interesting details behind the final payouts. For instance, the highest severance package of 2009 for companies covered by The Corporate Library went to a CEO who did not even resign from the company!
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Greg Ruel - Research Associate
