Mr Pink,
What type of board of directors would sign on to such a deal?Published: Tuesday, July 11, 2000
Wendt got $45 million bonus to take top job at Conseco
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TIM HUBER STAFF WRITER
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Conseco Inc.'s status as a Wall Street darling may be long gone, but its willingness to pay top dollar for a chief executive is not.
The struggling insurer doled out tens of millions in cash and stock to new chief executive Gary Wendt and his former employer, General Electric, according to a document filed Monday with the Securities and Exchange Commission.
Wendt received a $45 million after-tax bonus to take the job less than two weeks ago and will receive an additional bonus ranging from $8 million to $50 million depending on Conseco's share price in 2002.
Before taxes, Wendt's signing bonus may have totaled close to $90 million, though a precise figure is impossible to calculate, one accountant said.
That figure might seem high, but it's hardly unprecedented at Indiana-based Conseco or Green Tree Financial, the St. Paul-based finance company Conseco acquired in 1998. Conseco founder and chief executive Stephen Hilbert received $68.3 million in compensation in 1998, almost $143 million in 1997 and a $72 million severance package when he resigned in April. Former Green Tree chief Larry Coss received a $102 million bonus in 1996.
Wendt's new job puts him in roughly the same salary range as his former boss, General Electric chairman Jack Welch, who received $75 million last year. Wendt, 58, was chief executive of GE Capital for 12 years until he resigned in December 1998.
Wendt will not receive a salary during his first two years. His five-year contract does include a $1 million annual salary over its final three years, an annual bonus up to $2.8 million based on earnings growth, an annual grant of 500,000 shares of common stock and $1.5 million worth of restricted stock. Wendt also received options to purchase 10 million shares of Conseco for $5.88 per share. (Shares of Conseco closed Monday at $9.75.) A fifth of those options vest immediately and the remainder vest from 2002 to 2005.
Wendt also received 3.2 million shares of restricted stock worth $31.2 million on Monday if he stays with the company through June 30, 2002.
In exchange for allowing Wendt to get out of an employment agreement, General Electric received warrants to buy 10.5 million shares of Conseco stock for $5.75 per share. |
