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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