A $56 million golden parachute compensation will go to H.J. Heinz CEO William Johnson if the new owners of Heinz decide to terminate his employment, in the wake of the $23 billion Berkshire Hathaway buy-out.
Warren Buffett’s Berkshire Hathaway announced Feb. 14 that they would team up with Brazilian private-equity firm 3G Capital to take H.J. Heinz for $23 billion. The deal has yet to close and there has not been a decision on who will manage the company in the future.
One thing is for certain though: According to a proxy statement filed with the Security and Exchange Commission, current CEO William Johnson would get $56 million in direct benefits if the new owners decide to let him go.
“The payments reflect Mr. Johnson’s success in creating billions of dollars in shareholder value over his successful 15-year tenure as President and CEO,” Michael Mullen, a Heinz spokesman, told Bloomberg News. “This compensation consists of equity that Mr. Johnson accumulated over his 30-year career with Heinz and existing equity awards and contractual rights that were in place well before the announcement of the proposed merger.”
Mr. Mullen is primarily referring to accelerated payment of stock options and shares worth $30 million that would otherwise have been paid out later, but have been granted before the merger.
“The executive officers were not granted any additional equity awards in connection with the merger,” according to the proxy statement. However, these equity awards will be brought forward only on the condition that the merger goes through, even if Mr. Johnson retains his job.
The pure cash severance payment stands at $14.4 million and is to be paid if the merger goes through and Mr. Johnson is terminated as CEO.
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