H.J. Heinz CEO William Johnson's golden parachute may be built from beans and ketchup, but it's anything but mundane.
Johnson could receive a payout of $212 million if he leaves the company after the Pittsburgh-based food giant is taken private later this year, according to a Monday company filing.
Under terms of the $23.6 billion deal announced by Warren Buffett's Berkshire Hathaway holding company and private-equity firm 3G Capital Partners last month, Heinz says Johnson could receive $16 million in pay, $30.4 million in accelerated stock and stock options, nearly $1 million in perks and $8.5 million in other compensation.
Johnson's also scheduled to receive $57 million in accrued compensation and has nearly $100 million in vested stock, stock options and restricted shares, according to Heinz documents detailing payouts to Johnson and other key executives.
CFO Arthur Winkleblack and Executive Vice President David Moran could also receive large payouts, although they pale in comparison. Winkleblack could get nearly $40 million, Moran about $35 million.
Johnson, 64, was named CEO in 2000 and held a variety of management posts since joining the company in 1982. Heinz notes that his huge payout reflects equity that Johnson accumulated over a 30-year career as well as equity awards and an employment contract signed before the merger. Heinz spokesman Michael Mullen notes that Heinz has posted shareholder returns of 177% since 2006 and at $72.50 a share, the merger offer is a 19% premium over Heinz's previous trading high.
Still, the company's shares languished for the first several years under Johnson's leadership. It wasn't until early 2006, when activist investor Nelson Peltz and other dissident shareholders began amassing a stake, that Heinz shares caught fire. The company adopted key provisions of Peltz's turnaround plan, including cost-cutting and asset sales.
Johnson's golden parachute is among the largest since another longtime CEO, Sam Palmisano, departed IBM in January 2012. He received more than $170 million, including $76 million in deferred and accrued pay, $66 million in stock and a pension valued at nearly $30 million.
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