Company: Disney
Title: CEO
Years at Company: 1984-2005
Total Value of Severance Package:
$220 million
Most of Michael Eisner's career with the Walt Disney Company was rosy, taking the company's value from $3 billion to $60 billion. But in the early 2000s he was embroiled in an internal battle with Roy E. Disney, nephew of Walt, that became public. Disney resigned his own executive spot after losing power at the company and started savedisney.com. After many lackluster years, Eisner was unable to rebound from a shareholder revolt and the negative PR blitz.
Company: Pfizer
Title: Chairman and CEO
Years at Company: 1971 - 2006
Total Value of Severance Package:
$213 million
Unlike some other executives on this list, Hank McKinnell enjoyed only rare success while leading Pfizer. Share prices tumbled 40 percent after five years with McKinnell in charge, and sales were down 28 percent for 2005. Pfizer lost several important patents under McKinnell, who had a poor rapport with shareholders. "One of the problems we've always had on Pfizer is management just wasn't all that accessible to the financial community," analyst
Les Funtleyder said after McKinnell left.
Company: Home Depot
Title: Chairman and CEO
Years at Company: 2002 - 2007
Total Value of Severance Package:
$210 million
Financially, Robert Nardelli was a successful executive. But his relationships with other executives, employees, and shareholders were characterized by a heavy-handed management style that alienated many of his key people. Despite steady growth, Nardelli was unable to
satisfy shareholder demands for ever-higher stock prices. That, combined with what shareholders perceived as outrageous pay demands, led to Nardelli's departure (and extravagant payday).
Company: KB Homes
Title: CEO
Years at Company: 1972 - 2006
Total Value of Severance Package:
$175 million
Bruce Karatz's 30-plus year career with KB Homes ended in disgrace when he was accused of manipulating the company's shares in 2006. By April 2010, Karatz was convicted of mail fraud, lying to his own company accountants, and making false statements in connection with a stock backdating scheme designed to artificially inflate KB Homes' share value. "It was sort of like Nixon with Watergate. There was no evidence that he planned it, but he certainly covered it up," a
juror said.
Company: Merrill Lynch
Years at Company: 1986 - 2007
Total Value of Severance Package:
$161.5 million
After heavy investment in the subprime mortgage market caused Merrill Lynch to lose a record $8.4 billion in 2007, the company's board had little choice but to ask Stanley O'Neal to step down, after more than 20 years with the company. Still, observers considered O'Neal's exit package excessive. "He is walking away with a reward for risk-taking activity that, at least on the subprime side, turned out to be a disaster,"
said market watcher Brian Foley.
Company: UnitedHealth
Title: Chairman and CEO
Years at Company: 1988 - 2006
Total Value of Severance Package:
$161 million
William McGuire turned around UnitedHealth's fortunes, taking it from a $400 million-a-year company to one with tens of billions of dollars in annual revenue. But an investigation by The Wall Street Journal brought down McGuire, accusing him of backdating stock options. His severance didn't last long. The
Securities & Exchange Commission settled with McGuire agreeing in 2007 to pay a record $468 million.
Company: Fannie Mae
Title: Chairman and CEO
Years at Company: 1991 - 1996; 1999 - 2004
Total Value of Severance Package:
$148 million
Before Fannie Mae became one of the many scourges of the Great Recession, it was just your regular, run-of-the-mill home lender run by an ethically challenged CEO. With the Securities & Exchange Commission breathing down his neck in 2004, Franklin Raines stepped down. Raines and the SEC settled charges in 2008 that he had falsified financial records in order to get bigger bonuses,
agreeing to pay a relatively small sum of $2 million in fees and giving up $30 million in stock and benefits.
Company: Disney
Title: President
Years at Company: 1995-1997
Total Value of Severance Package:
$140 million
As one of the founders of Creative Artists Agency, Michael Ovitz was Hollywood royalty when he left the agency to assume the position of president at Disney. After just 16 months in the role, his displeasure at being second-in-command as well as disagreements with other Disney executives caused him to resign. He was given $38 million in cash as part of his severance agreement, as well as stock options valued at around $132 million that were granted when he was hired. In a subsequent shareholder lawsuit over the severance package, a judge ruled in favor of Ovitz and his $140 million payday.
Company: Coca-Cola
Title: Chairman and CEO
Years at Company: 1979-2000
Total Value of Severance Package:
$120 million
Doug Ivester attracted ire from company directors, including Warren Buffett and Herb Allen, for an ineffective management style, inept financial leadership, and a period of bad publicity. His departure, labeled a "retirement," was reportedly unexpected, but not without merit. As
one person close to the board told Fortune, "Doug was simply unable to give people a sense of purpose or direction."
Company: Morgan Stanley
Title: Chairman and CEO
Years at Company: 1997-2005
Total Value of Severance Package:
$113 million
After intense pressure from Morgan Stanley's board and Wall Street to retire, Philip Purcell threw in the towel in June 2005. With Purcell at the helm, earnings had fallen dramatically short of forecasts, which caused a public battle with a group of dissident investors and a slew of executive departures. "It has become clear that in light of the continuing personal attacks on me, and the unprecedented level of negative attention our firm—and each of you—has had to endure, that this is the best thing I can do for you, our clients, and our shareholders,"
wrote Purcell in a company letter following his resignation.
Company: Enron
Title: CEO
Years at Company: 1986 - 2002
Total Value of Severance Package:
$81 million
Under Kenneth Lay's oversight, Enron transitioned from a humble utility company to one of the national's largest electricity and gas companies. In 2001, Enron was on the brink of a multibillion-dollar merger with Dynegy, which would have
given Lay an $81 million parachute from the company that was ensconced in losses and an SEC investigation. Lay announced he wouldn't accept the package, and days later Dynegy halted negotiations. Enron declared bankruptcy by the end of the year and five years later Lay was found guilty of securities fraud and other charges.
Company: Conseco
Title: CEO
Years at Company: 1979-2000
Total Value of Severance Package: $72 million
In 1979, Steve Hilbert founded Conseco and built it into a large, successful insurance company, but by 2000, his mismanagement (including a disastrous acquisition of Green Tree Financial) caused the company's stock price to plummet while his personal debt climbed to $181 million. The company ultimately declared bankruptcy in 2002.
Company: Bankers Trust
Title: 1995-1999
Years at Company:
Total Value of Severance Package:
$55 million
Frank Newman was brought in to head Bankers Trust following a derivatives scandal that had discredited its reputation. He decreased the bank's exposure to highly leveraged derivatives, but funneled business into emerging markets and Russian government bonds, which wiped out its market value and decimated quarterly earnings in 1997. Deutsche Bank bought the bank in 1998 and
Newman was paid $55 million.
Company: Tyco
Title: CFO
Years at Company: 1991-2002
Total Value of Severance Package:
$45 million
With CEO Dennis Kozlowski, Mark Swartz swindled electronics company Tyco out of close to $600 million to support extravagant lifestyles. The duo was convicted of grand larceny, securities fraud, and falsifying business records in 2005. While still at the company, Swartz signed a contract calling for a $108 million lump sum upon his termination or retirement; as a compromise, he "only"
took $45 million.
Company: Washington Mutual
Title: Chairman and CEO
Years at Company: 1983-2008
Total Value of Severance Package:
$44 million
Kerry Killinger was largely responsible for turning a humble bank chain into a national behemoth that supplied adjustable-rate mortgages to unqualified borrowers. When the mortgage market collapsed, his overzealous loan tactics forced WaMu to close up shop, marking it the largest bank failure in U.S. history.
Company: Countrywide
Title: Chairman and CEO
Years at Company: 1969-2008
Total Value of Severance Package:
$44 million
Angelo Mozilo founded Countrywide Financial and built it into the country's largest mortgage lender. But the company became ensconced in predatory lending that ultimately caused it to be sold to Bank of America in 2008. BofA later committed nearly $9 billion to settle charges filed by 11 state attorneys general against Countrywide for its greedy tactics. Now a poster boy for greed and incompetence, Mozilo faces insider-trading charges from the SEC.
Company: Boeing
Title: CEO
Years at Company: 1997 – 2001, 2003 – 2005
Total Value of Severance Package: $44 million
Stonecipher came out of retirement in 2003 to join Boeing as CEO following a disgraceful demise of the previous CEO Michael Sears. Just 15 months later, he was forced to resign after a whistleblower alerted the board that he was engaged in an extramarital affair with a female executive, which violated the company's ethical code. "We just thought there were some issues of poor judgment that ... impaired his ability to lead going forward,"
said Boeing's non-executive chairman Lewis E. Platt following the news.
Company: Hewlett-Packard
Title: Chairman and CEO
Years at Company: 1999-2005
Total Value of Severance Package:
$40 million
Before Mark Hurd, another H-P CEO left in disgrace. When Fiorina ascended to the top job at one of America's great companies, she shattered glass ceilings. After six years that saw an unsuccessful merger with Compaq, and a stock price that had been roughly halved, she left, with a push from the board, with a shattered reputation —and a parting package of roughly $40 million in cash and stock. H-P shareholders filed suit, trying to get back the parachute, but Fiorina, who is now vying to become the next senator for California, prevailed.
Company: Hewlett-Packard
Title: Chairman and CEO
Years at Company: 2006-2010
Total Value of Severance Package:
$35 million
The most recent addition to the list, Mark Hurd was asked to resign abruptly on August 6 following news that a former reality-television star had accused Hurd of sexual harassment. Hewlett-Packard's board cited expense report irregularities and actions that opposed the company's code of conduct, but said he did not violate the tech giant's sexual-harassment policy.
Company: AIG
Title: President and CEO
Years at Company: 2002 - 2008
Total Value of Severance Package:
$19 million
Though he had been ousted from AIG's top perch before the company received $200 million in government funds, Martin Sullivan supervised the firm's subprime mortgage exposure and oversized bonuses that contributed to the largest quarterly losses in the company's history. He left with a $19 million payday, though the funds were later frozen.
