Pall Corp. CEO Lawrence D. Kingsley, on the job less than four years, is in line for a golden parachute worth more than $109.2 million when Danaher Corp.'s $13.8 billion acquisition of the Port Washington filtration and purification company closes, according to regulatory filings.
The payout involves accelerated vesting of stock options and restricted stock following a change in ownership.
Compensation experts say the raw number -- more than $2 million for each month Kingsley worked at Pall -- are influenced by the tripling of Pall's stock price since Kingsley joined the Port Washington company in October 2011.
"The $100 million is a pretty big number," said Chris Crawford, president of Longnecker & Associates, a Houston compensation consultancy. But he pointed to the performance of Pall's stock as an indication that Kingsley's payout was justified.
Aaron Boyd, director of governance research at executive compensation research firm Equilar Inc., said a more conservative accounting of Kingsley's compensation related to the merger calculates it at $74.1 million, still "one of the bigger payouts for a CEO that we've seen over the last several years." That accounting measures cash but does not include stock and options vested as of June 1 or compensation programs available to other Pall employees.
Washington D.C.-based Danaher, which announced plans to split into two companies by the end of 2016, declined to respond to a request for comment. Pall, whose acquisition is expected to close by year's end, did not respond to a request for comment.
Pall shareholders must vote to approve the merger with Danaher but have only a nonbinding advisory vote on executive compensation related to the deal.
Boyd said executive compensation matters rarely present a hurdle for large deals.
On Kingsley's first day as CEO, Pall's stock closed at $41, according to Nasdaq.com. On Tuesday the stock closed at $124.99. "Those are significant returns," Crawford said. Pall agreed to a $127.20 per share cash offer from Danaher in May.
"It is pretty impressive," said Anoop Rai, a professor of finance at Hofstra University. "There's a lot of value added."
Though Pall's revenue only inched ahead during Kingsley's tenure, he managed to squeeze more cash flow from operations, a metric that appeals to investors, Crawford said.
Other Pall executives and directors are in line to receive equity awards worth up to $8.2 million.
Rai said that large golden parachute payouts sometimes give executives an incentive to merge or sell the business they lead.
After the merger, Danaher has said, Kingsley will work closely with Tom Joyce, Danaher's president and CEO, on the leadership team for after the acquisition.
In another big executive payday, chief executive Robert Marcus of Manhattan's Time Warner Cable Inc. could get at least $85 million if he's terminated within two years of Charter Communications Inc.'s roughly $55 billion acquisition of his company, which was announced in May, Bloomberg has reported.