Not only do eBay's top-tier executives get huge bonuses to stay with the company until the breakup is complete ("Golden Handshakes"), those who stay on after the split get the promise of huge bonuses if they end up leaving under "Golden Parachute" provisions.
Reviewing eBay's proxy filing for an article about executive compensation for tomorrow's Newsflash (now available
), it becomes clear many millions of dollars are on the table, no matter what goes down.
Here's a look at the Golden Parachute provision for the top four eBay execs.
- eBay CEO John Donahoe and CFO Bob Swan get $3 million and $1.9 million in compensation, respectively, if the board lets them go "other than for cause."
- PayPal president Dan Schulman, who will become PayPal CEO after the split, scored a $20 million parachute, while eBay Marketplaces president Devin Wenig, who will become CEO of eBay after the split, scored even more: $22.5 million.
How the board treated eBay Chief Technology Officer Mark Carges last year shows it has leeway in how it doles out benefits to departing executives.
Carges was at eBay for 6 years and, among other responsibilities, he oversaw eBay's search engine team. Despite the fact it was he who terminated his employment - and at a crucial time, just 4 months after eBay's security breach - eBay's board awarded him a generous separation package that included $468,750 and 18 months' worth of COBRA (health insurance) premiums.
eBay's board of directors also made a point of praising its "named executive officers." In a letter to shareholders included in the proxy statement, the board extended its heartfelt thanks and deep appreciation to Donahoe and his corporate leadership team, who led the strategy work that resulted in the Board deciding to separate eBay and PayPal.
"The decision by Mr. Donahoe and his team to not place themselves in operating roles in either of the new companies has enabled a highly effective separation process and smooth management succession plan."