United Technologies made big news earlier this month when it announced the retirement of long-tenured and charismatic Chief Executive Officer George David, now replaced by former President Louis Chênevert.
Unlike many CEOs, David has collected wet kisses from the press over the years. Not long ago a New York Magazine story bestowed on him the highest accolade our nation offers, i.e., “rock star.”
And in 2004, a year in which David earned an astonishing $98 million, Business Week pronounced him “The Unsung CEO.” I guess this just proves singing is overrated, as American Idol watchers already know.
Stock Option Jackpot
In 2007, his final triumphal year, David’s total compensation topped $38 million, including over $7 million in cash incentives and $16 million in stock-related awards.
By the way, according to USA Today he managed to grow an additional $54 million richer last year by exercising some stock options he already had.
The company’s proxy statement also reveals that David availed himself of $380,000 in personal travel on company aircraft and $36,000 in “leased vehicle payments.” On top of that, the firm gave him a $123,000 cash “perquisite allowance” to spend, I guess, on other stuff he might want. (It’s fortunate that my kids, who consider their own allowances chintzy, find this column way too dull to read.)
Pension Rewards
Retirement will bring further rewards for David, and we’re not talking rocking chairs here. According to footnotes in the proxy statement, rendered in teeny tiny type, he’s entitled to a lump-sum pension payout of $33 million along with a “separation benefit” of $4.75 million.
The company has also promised him life insurance for the rest of his days, projected to cost shareholders $307,000 in annual premiums over the next 15 years, along with $165,000 each year to cover the related income taxes.
David will stay on as chairman and his duties, per the company’s bylaws, will include “supervision” of the new CEO. (David was himself under the chairman’s oversight when he was CEO, but since he held both posts he was, like many superstar CEOs, self-supervising.)
It’s not clear Mr. Chênevert will get as much love from journalists as his predecessor. Thus far, few publications have even used the correct accent mark in his name. It’s a circumflex, folks.
Wendy Fried, a freelance writer, is a contributing editor at footnoted.org and also blogs about matters corporate at her own site, proxyland.blogspot.com.
