Black & Decker Corp. Chief Executive Nolan D. Archibald will not receive a $20.5 million severance package following New Britain-based Stanley Works‘ purchase of the tool maker but may receive a bonus of $45 million if cost savings goals are met in three years.
Archibald and the board of directors agreed it was appropriate he waive his right to the severance package, given salary and compensation in his new role, said Roger Young, vice president of investor and media relations for Black and Decker.
“It was one part of the negotiation. There was a lot of negotiating that went on,” Young said.
Archibald, who also serves as chairman and president, is technically being terminated from his job because of the acquisition. Stanley CEO John Lundgren will be CEO of the new company, while Archibald will serve as executive chairman of the new company, Stanley Black & Decker, for three years.
Archibald, who took the helm of the company in 1986, will now receive an annual base salary of $1.5 million, up to $1.9 million in annual bonuses in his new pay package and stock options and awards. Provided Archibald meets certain goals, he may receive a bonus of up to $45 million on the third anniversary of the purchase’s completion if costs are cut by at least $350 million.
Executives have they may need to cut jobs and that most of the savings will come from reducing corporate overhead and consolidating operations.
Archibald is still entitled to benefits, or perks, that he has been receiving. In 2008, that was personal use of the company’s aircraft, valued at $328,415. In addition to benefits like supplemental retirement savings and tax reimbursement payments, Archibald also was permitted to use a company car at a cost of $78,929.
Stanley on Monday agreed to pay $3.46 billion for Black & Decker in an all-stock deal, which creates the nation’s largest tool maker. Black & Decker shareholders will receive stock valued at $57.57 for each share held. Stanley shareholders will own about 50.5 percent of the combined company, while Black & Decker shareholders will hold a 49.5 percent stake.
Stanley’s brands include its Stanley tools line, along with FatMax, Bostitch and Mac Tools. Black & Decker, in addition to its namesake line, owns DeWalt, Porter-Cable, Kwikset and Baldwin brands. (AP)
