Can’t get paid until your company pays back its TARP debt? Rather get fired than have to worry about paying it back? Get another company to pay the debt off for you!
That’s exactly how 5 execs from Marshall & Ilsley Corp (a bank holding company) plan to get paid, according to The Business Journal.
CEO Mark Furlong, for example, would not get paid the $18 million “golden parachute” package that he has written into his contract with M&I if the company changes control (aka, he leaves) while it still has to pay back TARP.
The same would happen to these M&I executives: Greg Smith, who has a $5.5 million parachute, president Tom Ellis ($4.1 million), wealth management head Ken Krei ($5.5 million), and senior vice president Thomas O’Neill ($5.1 million).
And it might be difficult for them to pay back TARP, seeing as they’ve put off paying back the $1.7 billion loan until now (as of October 2010, they planned to pay it back in “late 2011”).
None of the executives would get their golden parachutes if M&I were bought by another company, for example. Like if BMO Financial (Bank of Montreal) bought M&I and took over management, they might not get paid; they might get fired and have to walk away with nothing.
However, BMO is buying M&I (for $4.1 billion), and the execs will get their parachutes. Here’s how.
The Milwaukee Business Journal found a BMO company filing that explains how the businessmen will get paid.
From the MBJ:
BMO Financial said in the filing it will, in fact, pay off M&I’s TARP debt immediately before closing its purchase of M&I, erasing that issue.
So the best thing that could happen is they all get fired when BMO takes over.
Furlong has the best deal of all:
Furlong has a three-year employment agreement with BMO that includes an annual salary of $600,000, incentive payments of up to $800,000 per year and equity awards with a value of up to $1.1 million. He also will receive a $6 million “transition completion payment” if he stays with BMO for at least one year after the transaction closes.
Six million is great but Furlong will still be better off if he gets fired.
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