The Hartford Financial Services Group’s majestic stag is, as we speak, adorning the jerseys of a Tokyo area baseball team called the Chiba Lotte Marines. According to the head of The Hartford’s Japanese subsidiary, it’s all part of the firm’s campaign “to become a household word in Japanese.”
Coincidentally, I’m wondering whether The Hartford’s executive compensation disclosure would make more sense in Japanese, because the English language version isn’t as helpful as you might expect.
Proxy statements these days must explain the severance payouts executives would get in the event of their parting. So when property/casualty head David Zwiener resigned last June, you might very sensibly have turned to The Hartford’s past proxy disclosures to see how much severance he was due. And you might very sensibly have concluded the answer was zero.
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Sweet Deal
In which case, you would have been way off. The Hartford’s 2007 proxy, filed a few weeks ago, says $11.5 million went to Zwiener as he walked out the door.
According to The Hartford’s press release, Zwiener quit to accept a hot job offer from The Carlyle Group. Past disclosures suggest this voluntary departure should have yielded him only unused vacation pay and the right to exercise vested stock options.
So the big payout is puzzling. True, Zwiener hung around through August to assure “a smooth transition,” and we all know working in summertime is a drag, but is it really an $11.5 million drag? (At the time of Zwiener’s resignation, The Hartford did say it was sweetening his deal a bit by letting him vest in his 2008 equity awards even though he wouldn’t be around at year-end. But that was all.)
A footnote in the latest proxy details the $11.5 million sayonara: a bonus of $830,000, a “severance payment” of $4.48 million, and $6.2 million in goosed-up retirement benefits (magically produced by pretending Zwiener had put in another two years of service).
Funny, I thought the whole point of high-priced “incentives” was so a company could say, “Hey, hang around a while longer and you’ll get big bucks.” But this looks more like: “Leaving already? Here, take some big bucks for the road!” Unless, that is, we’re losing something in the translation.
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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.
