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Michael Brush

Company Focus11/28/2007 12:01 AM ET

The 5 richest payoffs for fired CEOs

Many axed CEOs depart their troubled companies with millions of dollars in cash, stock and options -- like Merrill Lynch's Stanley O'Neal did last month. Here are five who stand atop this golden goodbye club.

By Michael Brush

The sweetest sound on Wall Street these days? "You're fired."

Regular folks may get a modest pension or maybe just a box for their personal items. But for Wall Street CEOs, the exit sign needs at least eight digits.

The latest example is the $161.5 million retirement package collected by former Merrill Lynch (MER, news, msgs) chief Stanley O'Neal on his way out the doors of the troubled brokerage last month.

On O'Neal's watch, Merrill cranked out risky debt instruments backed by dodgy subprime mortgages. Then last month, O'Neal left the brokerage amid revelations of Merrill's heavy exposure to the imploding mortgage market.

Despite all the problems that developed while he was at the helm, he will benefit nicely if his successors can clean up the mess. Most of the value of O'Neal's golden goodbye comes in the form of restricted stock and stock options. But astonishingly, unlike options or stock grants that are wiped out or expire quickly for regular employees when they leave to "spend more time with the family," O'Neal's awards will continue to vest for years to come under a timetable set years ago.

The big 5

O'Neal, of course, is not the sole member of the exclusive corner office golden goodbye club. Paul Hodgson, a CEO pay expert at The Corporate Library, estimates that getting rid of the CEOs at 16 investment banks and financial institutions that potentially have the biggest exposure to the subprime mess would cost an astonishing $1 billion, including O'Neal's take. Angelo Mozilo, who as co-founder and chief of mortgage lender Countrywide Financial (CFC, news, msgs) bears a good bit of the blame for the current subprime mess, would collect more than $73 million, according to Hodgson.

As big as O'Neal's $161.5 million "retirement package" was, he ranks only fifth in the golden goodbye club so far this millennium. Below are the other CEOs who got even more loot than him on the way out the door, with numbers courtesy of an Oct. 31 Corporate Library research note on this problem called "Too Little, Too Late."

No. 4: Ex-Gillette chief James Kilts. Total retirement take: $165 million.

It's been more than two years since Procter & Gamble (PG, news, msgs) took over Gillette, putting Gillette CEO James Kilts out of a job. A lot of CEOs have left their corner offices since then, but Kilts' golden goodbye was so huge it still takes the No. 4 slot for the all-time biggest retirement payouts this millennium. His take: $165 million, including a $13 million "gross-up" payment to help cover taxes triggered by a golden parachute. In response to criticism in the local press for this huge retirement cash-out, Kilts described himself as "Boston's piñata" and argued that he earned the pay by creating billions of dollars in shareholder wealth.

Continued: Home Depot's former CEO

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