DuPont, Dow CEOs to get $80mn golden parachute

Mar 03, 2016, 1:42 PM EST
Source: uhhconferencecenter/flickr
Source: uhhconferencecenter/flickr

The outgoing CEOs of DuPont and Dow will get a combined $80mn golden parachute prior to the the firms' merger.

Reuters reports:

"Golden parachute" payments are contracts that give a top executive substantial benefits if the company is taken over and their employment is terminated as a result. Dow CEO Andrew Liveris will get $52.8 million in cash, stock and other payments, including about $40 million he is already entitled to on his retirement, DowDuPont said in a regulatory filing. DuPont's Edward Breen, who replaced Ellen Kullman as CEO in October, will get $27.2 million, DowDuPont said. Liveris, who has been with Dow for 40 years, has said he planned to retire by the second half of next year. He is credited with orchestrating the merger that was valued at $130 billion when unveiled in December. Once the merger closes, which is expected to happen in the second half of this year, DowDuPont plans to break up into three separate companies focused on agriculture, material sciences and specialty products. The two chemical companies held numerous merger talks, initiated by Dow, over the years, DowDuPont said in the filing, adding that Kullman and Liveris began talks of a potential "merger of equals" last May. The news of Liveris's retirement was seen as a victory for Daniel Loeb, the head of New York hedge fund Third Point, which has a 2 percent stake in Dow. Loeb had been questioning Dow's leadership since 2014, amid slumping share prices. writes:

The disclosure comes as both companies are in the midst implementing $3 billion worth of cost-cutting measures and mass layoffs. DuPont alone has a $700 million cost reduction and restructuring plan that includes layoffs for 1,700 research scientists, technicians, managers and others in Delaware. In the filing with the SEC, the companies said the U.S. Department of Justice Antitrust Division has requested additional information and documentary material to review the merger. The companies said they would “respond promptly” to the request, but it could slightly delay the merger, which is slated to be finalized later this year. The Dow-DuPont merger will be worth $130 billion. After merging, the companies plan to split into three separate entities focused on agricultural chemical, material sciences and specialty chemicals. notes:

Breen, who took over DuPont last fall, has separately piled up DuPont stock options worth $7 million, which could be worth more if the merger and breakup plan succeeds in boosting his company's lagging share price. The name "Breen" became a verb - breening, breened - for job cuts in Wilmington this winter, as the boss announced 1,700 departures in and around DuPont's Delaware headquarters, central research, engineering, management, and support services. The filing details how Breen's predecessor, Ellen Kullman, launched merger talks with Dow in the fall of 2014, six months before she narrowly beat back an insurgent board of directors challenge led by hedge fund boss Nelson Peltz, whom Kullman supporters accused of scheming to break up the company. Talks accelerated after Breen replaced Kullman as CEO in October.