Office Depot Inc. Chief Executive Officer Roland C. Smith may earn $46.8 million following the company's planned sale to Staples Inc., the world's largest office- supplies retailer.
Smith would get $39.3 million from accelerated vesting of equity awards, which he received during his 16 months at the company, once the deal is completed, according to a regulatory filing last week. He also would get $7.5 million in cash if his role changes following the acquisition. Staples CEO Ronald L. Sargent, or whoever is head of Staples before the purchase is finalized, will lead the combined company, the filing shows.
"It's a lot of money in a short time, but he also accomplished what he set out to do in a short amount of time," said David Strasser, an analyst who covers the company for Janney Montgomery Scott. "If you're a shareholder, you've had a pretty substantial win owning this stock since Roland got there."
Staples said last month it's planning to buy Office Depot in a deal that would create a retail chain with thousands of stores and about $39 billion in revenue. The Federal Trade Commission is expected to scrutinize the combination, which would consolidate the U.S. office-supply industry into a single chain.
Four other Office Depot executives have golden parachute agreements, or severance packages, worth $38.3 million in total. Karen Denning, a spokeswoman for Office Depot, declined to comment beyond the filing.
Office Depot investors will vote on the terms of the sale and the company's proposed golden parachute payments at the next annual shareholder meeting. While shareholder votes on the purchase by Staples are binding, their votes on the payouts are advisory and non-binding.
Smith, 60, became chairman and CEO in November 2013 after Office Depot combined with OfficeMax Inc. The board referred to his "retail experience and experience managing complex integrations and turnarounds" as motivation for naming him as a director, according to a filing at the time.
Office Depot shares have gained 79 percent since Smith became CEO while the Standard & Poor's 500 Index has increased 22 percent.
Smith was CEO of Triarc Cos., owner of the Arby's brand, when it bought Wendy's International Inc. in 2008. The combined entity spun off Arby's in June 2011, and Smith continued to run Wendy's until September 2011, when he terminated his employment with the company before it moved its headquarters from Atlanta to Dublin, Ohio. He served as a special adviser to the burger chain for the remainder of 2011.
"He has done mergers before and when you talk to him it's very clear that this is a core competency of his — integrating businesses," Strasser said.
Wendy's paid Smith $11.4 million in severance, including $7.6 in cash and $3.8 million in accelerated vesting of equity awards, according to an April 2012 filing.