The golden parachute is evolving into the platinum kiss.
Scores of CEOs depart the corner office with huge exit packages. But recent deals — making retiring executives newly minted $100 million (and up) men — are raising eyebrows even among those accustomed to oversized payouts.
The latest execs who will cash in as they step aside: Nabors Industries' former CEO, Gene Isenberg, due $126 million when he exits as chairman, and IBM CEO Sam Palmisano, due $170 million. They follow Google's Eric Schmidt, who received $100 million in stock after leaving as CEO.
Worth it or not, the trio underscore the pay inequity that has made Corporate America's elite ripe targets of populist movements such as Occupy Wall Street. Moreover, their paydays draw fresh wrath from corporate governance experts.
"While the contracts and performance of these CEOs differ, they do nothing to serve public opinion at times like these," said Eleanor Bloxham of The Value Alliance. A closer look:
Isenberg's exit deal calls for $100 million cash, plus $26.4 million in stock. Nabors said shares are up "50 fold" under Isenberg since 1987, but lag the Standard & Poor's 500 index the past decade. Moreover, Isenberg, 81, drew over $100 million in pay and bonus in 2008-2010 alone.
"Nabors has a history of high pay relative to any standards of propriety," said Robin Ferracone of compensation consultant Farient Advisors. "But $100 million because he no longer has a title is clearly a bad deal for shareholders."
Yet under an earlier exit deal, he would have pocketed even more: $525 million. "It used to be a hell of a lot bigger until the board reduced it," notes Dennis Smith, Nabors' director of corporate development.
The Internet search giant gave Schmidt $100 million in stock after elevating him to "executive chairman" even though Schmidt had an equity stake worth over $5.5 billion. As chairman, he could get up to $7.25 million a year.
"Totally over the top," Bloxham said. "There's no sense among directors that this isn't the best allocation of capital?"
Google stock rose about 580 percent under Schmidt. Willa Lo, Google's investor relations representative, did not respond to e-mails or calls.
Palmisano, who'll be out as CEO Jan. 1, has a payout valued at over $170 million: $76 million in deferred or accrued pay, $65.7 million in stock and a $29.7 million pension. "Most reflects what he's accumulated over his career," said IBM's Mike Fay. IBM rose more than 160 percent under Palmisano's watch, vs. the S&P 500's 32 percent gain.
Several other lucky CEOs are in for big paydays, based on mergers that trigger golden parachutes. Motorola Mobility CEO Sanjay Jha could pocket more than $65 million after the company's buyout by Google. Temple-Inland CEO Doyle Simons is due $61.4 million if shareholders approve the company's merger with International Paper . And as chairman of newly merged Stanley Black & Decker, Nolan Archibald gets $43 million this year and a bonus of up to $45 million in 2013.
Compensation consultant Alan Johnson of Johnson Associates notes that there are more platinum kisses coming, planted when the economy was robust and boards were under less scrutiny.
"These things can come back and bite you when the economy is down and you've got Occupy Wall Street," he says. "They certainly stick out and drive us all crazy."
This story first appeared in USA Today.