Fired Sara Lee Exec Gets $11.3 Million for Being Fired

Well, We Wouldn’t Want Him to Feel Bad, Would We?

When the rest of us do a lousy job at work, you know, mess up so much that the company doesn’t want us anymore, they fire our sorry butts.  But the same rules do not apply if you are an executive with a nice large corporation.  In that case, after you demonstrate you incompetence to such a degree that you are no longer wanted, you are asked, nicely of course, to resign.



A Great Place to be a Lousy Exec



Such is the case with Sara Lee executive C.J. Farleigh.  Mr. Farleigh will be leaving Sara Lee, but not to worry, even in this age of economic difficulties Mr. Farleigh will be ok.  Here is what Mr. Farleigh will be getting.

Sara Lee will pay Mr. Fraleigh a pro-rated portion of his earned annual incentive for fiscal 2012; his annual base salary through his termination date of Jan. 13, 2012, based on his most recent base salary of $597,000; and severance pay totaling $2,063,378 payable over 21 consecutive months. The cash severance represents continued salary plus 75% of his target annual bonus for fiscal 2012, which ends June 30. And after the conglomerate splits, all unvested equity held by Mr. Fraleigh as of Jan. 13 will vest.

All of which is a nice total of $11.3 million.  And it’s nice that he gets his 2012 bonus for good performance, and that his performance was so good that it got him terminated. And it is nice he gets to vest in his stock options, because vesting comes from doing a good job which he obviously did since he was fired.

Now the fine folks at the Wall Street Journal who wrote this piece consulted Mark Reillly,  an expert in compensation, who said this.

"It's a competitve package,'' Mr. Reilly said

Really,  competitive with what?  Were there other companies looking to fire Mr. Farleigh who caused Sara Lee to get into a bidding war to see who would pay Mr. Farleigh the most money to resign?  Is there status for Sara Lee in dumping millions of dollars on a failed executive, so much so that the more company money that is paid to fire an executive, the better the company looks?  Or maybe Mr. Farleigh threatened to tell everyone that he was fired unless he got millions, no wait a minute, everyone knows he was fired resigned.

One thing everyone can agree upon is that increasing the taxes on people like Mr. Farleigh to help close a huge budget deficit would be class warfare.  And hasn’t Mr. Farleigh suffered enough what with having to get by with only $11.3 million in severance payments?