Yes, life is beautiful.
But not totally. Despite the big bucks, some former CEOs are treated far better than others. Take the cases of Edward E. Crutchfield, who retired from First Union Corp. last year, and Verne G. Istock, who left Bank One Corp.
In his departure, First Union's board treated Crutchfield like a hero, praising him for "outstanding leadership," citing "his distinguished and illustrious career," and noting that he built what had been a small, North Carolina bank into the nation's sixth-largest banking company."
The directors stated that they were giving Crutchfield $1.8 million a year, tax-free, for the rest of his life. And the board pointedly said that the $1.8 million would be "in addition to, and not in lieu of, any of the Executive's retirement benefits."
As if that were not enough, Crutchfield, for the first 10 years of his retirement, will have use of the corporate airplane for up to 120 hours a year, and can bring along as many fellow passengers as he wants with him. After 10 years, he will have access to the plane 60 hours a year, and 10 years after that, 30 hours yearly for the rest of his life. To be sure, Ed Crutchfield will be flying high.
On top of that, the company will provide Crutchfield--for the rest of his life--office space, a personal secretary, office supplies and stenographic assistance, "commensurate with his current position as chairman." In addition, the board is giving him his company car and agreed to pay any medical bills not covered by his regular benefits package.
And the board has even assured that Crutchfield will continue to get his benefits even if the company is acquired or if new management, less sympathetic to him, takes over. What more could he ask for?
In comparison, Istock looks poor despite his $8.2 million goodbye package. Not one kind word was said about him; the agreement, also filed with the SEC, sounded more like a toughly negotiated deal--which it probably was--than a kind goodbye present. And unlike Crutchfield's, Istock's agreement makes clear that the former executive will have to pay taxes on his lump-sum payment.
Istock gets office space, too, but the agreement calls for it to be "reasonable." And he will receive "secretarial support and parking privileges (equivalent to parking privileges for senior executives) for life, or if earlier, until Executive commences full time employment with another employer."
Making the deal look more like a payoff than a thanks, it includes an agreement that Istock will not sue the company for just about any reason other than to enforce the departure agreement. Istock agreed not to sue Bank One under the Age Discrimination in Employment Act of 1967, Title VII of the Civil Rights Act of 1964, and the Americans with Disabilities Act of 1990.
Like Ed Crutchfield, Istock had been with Bank One and its predecessors for decades--36 years, in fact. He was "interim" CEO of Bank One for three months after his predecessor, John McCoy, was ousted last year. Istock, 59, wanted to stay on in that job, and that might explain the tone of the departure agreement.
Most of Istock's career was spent at the National Bank of Detroit, which became NBD Bancorp. In 1995, NBD bought First Chicago Corp., and the merged company became known as First Chicago NBD. In 1998, First Chicago NBD was acquired by Bank One, and that was the beginning of the end for Istock.