ARCO'S BIG PAYDAY; NEARLY ALL ARCO EMPLOYEES WILL GET SEVERANCE PACKAGES IN BP AMOCO DEAL, BUT NONE AS RICH AS CEO'S.Byline: Ben Spiess Scripps McClatchy Western Service For Atlantic Richfield's top executives, severance will be sweet. If the takeover of Los Angeles-based Arco by BP Amoco is approved by shareholders and regulators, Arco chairman and chief executive Mike Bowlin would get $11.6 million in pay and stock, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the company proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. . Bowlin also would get a retirement of $900,000 per year for the rest of his life. Last week, London-based BP Amoco announced a $25.6 billion deal to buy Arco, a deal expected to close by year-end. It would create the world's second-largest oil company. Bowlin isn't the only Arco employee who would receive a severance if the deal is completed. Other senior executives would get smaller golden parachutes of three years' salary, two years of bonus pay and stock, according to the proxy statement. For example, Ken Thompson (person) Ken Thompson - The principal inventor of the Unix operating system and author of the B language, the predecessor of C. In the early days Ken used to hand-cut Unix distribution tapes, often with a note that read "Love, ken". , former Arco Alaska Inc. president and a current executive vice president in Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. , would get about $3 million in stock and $1.6 million in pay. Other Arco employees would get smaller severance deals if BP terminates them. Arco's change-of-control agreement is unusual because it guarantees severance pay Severance Pay Compensation that an employer gives to someone who is about to lose their job. Notes: Severance pay is not always paid to employees. It depends on the situation in which the employee is losing their job and whether legislation requires severance to be paid. for almost all Arco employees, Fischer said. Compensation ranges from six months' pay to three years of salary, bonus and stock options for top officials. BP believes the deal will save the company $1 billion a year, much of it in Alaska, where BP and Arco have twin staffs, different buildings and dual operations in the Prudhoe Bay Prudhoe Bay, inlet of the Beaufort Sea and Arctic Ocean, N Alaska, in the Alaska North Slope region, east of the Colville River delta. In 1968 one of the largest oil reserves in North America was discovered in Prudhoe Bay. field. BP predicts 2,000 Arco layoffs worldwide if the deal is approved, primarily from Arco's Los Angeles headquarters and facilities in Texas and Alaska. While the fate of other top executives is undecided, Bowlin said he will leave the new company. Rich by most standards, Bowlin's severance pay is skimpy skimp·y adj. skimp·i·er, skimp·i·est 1. Inadequate, as in size or fullness, especially through economizing or stinting: a skimpy meal. 2. Unduly thrifty; niggardly. in the realm of executive golden parachutes, analysts said. Five executives at Bankers Trust The Bankers Trust is a historic American banking organisation that was acquired by Deutsche Bank in 1998. It was originally set up when banks could not perform trust company services. got an average severance of $37.5 million when Deutsche Bank took over. The chief executive of an Ohio manufacturing company recently got $20 million when tire company B.F. Goodrich Co. bought the firm. ``It's definitely on the low end,'' said Randy Ramirez, a consultant with Compensation Resource Group Inc. in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. . Bowlin's severance, and the pay for other Arco employees, is guaranteed by ``a change of control arrangement'' that Arco management put into effect in 1997. Bowlin said last week that the agreement helped the BP deal get done by taking the problem of employee pay off the table. ``We went into the negotiations without (executives' and other employees) pay being an issue,'' said Linda Dozier Dozier may be: People:
For Bowlin, the agreement kicks in two separate financial windfalls when BP's takeover is complete. The first is a payment of three years' salary and an amount equal to about two years of bonuses. Bowlin's salary and bonus each total about $1 million a year, giving this payment a value of about $5 million. The agreement also affects stock Bowlin has received but cannot sell and stock ``options'' that give him the right to buy a given amount of Arco stock at a fixed price. These options have restrictions on when Bowlin can convert them into stock. But when BP takes over Arco, all of his stock and option restrictions are lifted. If Bowlin takes advantage of those changes, his gain would be $6.6 million at Wednesday's prices. CAPTION(S): 2 Photos PHOTO (1--Color) Arco Chairman Mike Bowlin, center, is expected to receive $11.6 million in pay and stock from Arco's deal with BP Amoco. Reed Saxon/Associated Press (2--Color) Arco employees will receive severance plans ranging from six months' pay to three years of salary, bonus and stock options. Daily News |
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