Regions

$80 Million ‘Golden Parachute’ Package For Dow And DuPont CEOs

March 5
12:20 AM 2016

DowDuPont, the yet to be formed entity following merger of DuPont and Dow Chemical Co., has revealed paying in total $80 million to the chief executives, through a regulatory filing.  The 'Golden Parachute' payments will be made after splitting of DowDuPont into three companies.

Golden Parachute payments are the substantial benefits for the top executives in case of eventual termination followed by mergers. Andrew Liveris, Dow CEO has been entitled to receive $52.8 million in cash, stock and other payments, which includes his retirement benefit of $40 million. Meanwhile, Edward Breen, DuPont's CEO, will get $27.2 million, reports Reuters citing the regulatory filing of DowDuPont as the source.

The two companies have agreed for splitting into three separate companies following a $130 million merger in December and the split-off entities are yet to be named. Two of the three companies will specialize in agriculture and specialty products with headquarters in Delaware.

However, the rest with focus on material sciences will be based in Dow's hometown of Midland, Michigan. Breed will lead the merged entity as the CEO, but his future role hasn't been announced yet, according to a report published in The News Journal.

Liveries has been leading Dow for the last ten years and will receive the $40 million even though the merger doesn't take place. Meanwhile, Breen, joined DuPont last fall, has already piled company stock worth $7 million, which may worth more if the merger and breakup plan succeeds in boosting his company's lagging share price, reports Philly.com.

The merger has been expected to complete during the second half of this year. Though the two chemical companies are in merger talks for years, but finally Kullman and Liveries have started talks for a potential 'merger of equals' in May.

Liveries's retirement has been analyzed as a victory for Daniel Loeb, head of Third Point, a New York based Hedge Fund with 2% stake in Dow. Loeb has been questioning Dow's leadership since 2014 following slumping share prices.

DuPont and Dow, both have confirmed receiving requests for additional information and documentary materials on merger from the US Department of Justice Antitrust Division. However, both of the company has been predicting for the request and is expected to respond promptly.

The terminology-''Golden Parachute' appears for the substantial benefits for the top executives in case of eventual termination followed by mergers. Though proposed entity, DowDuPont, has used the terminology in the regulatory filing for both CEOs of Dow and DuPont, but actually is applicable only for Liveries. Because, Breen has secured job as CEO for DowDuPont, which is yet to be announced.

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