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eBay Pays $23 Million to Keep CEO through Breakup

eBay’s board of directors adopted a measure to entice top-tier executives to stay until the breakup with PayPal is complete. Bloomberg did the math and determined eBay CEO John Donahoe will receive a retention bonus worth about $23 million. That’s after the executive had already committed to stay on until the split.

eBay’s filing with the SEC explains, “Under the terms of the arrangement, called the Transaction Success and Retention Program, each Departing Executive Officer would be entitled to certain benefits in the event the officer remains employed through the separation of the Company’s ecommerce and payments businesses and his or her employment is terminated at the time of separation.”

The benefits for the CEO and CFO, for example, includes a cash payment equal to two times annual base salary and two times the annual cash incentive paid at the target amount, as well as the acceleration of all restricted stock unit and stock option awards.

Such retention provisions are usually written into an executive’s contract when newly hired – called a golden handshake.

According to Bloomberg, eBay will give CFO Bob Swan a retention bonus of about $12 million when the separation is completed. It said other executives who won’t be joining eBay or PayPal after the split include senior vice presidents Michael Jacobson (General Counsel); Elizabeth Axelrod (human resources); and Alan Marks (corporate communications).

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.