Dow Chemical Co. and the DuPont Co. have agreed to pay Dow's lame-duck CEO, Andrew Liveris, $53 million in cash, stock, and tax reimbursement payments, and DuPont CEO Edward Breen $27 million in 2017 after the combined companies break into three successor firms, the companies told investors and the Securities and Exchange Commission in a filing Wednesday.
The CEOs have assembled these multimillion-dollar pay packages, which the company filing calls "golden parachutes," while planning and executing billions of dollars in cost cuts and plant and warehouse closings.
After 10 years running Dow, Liveris would eventually have collected $40 million of that $53 million, even without the merger, the filing says.
Breen, who took over DuPont last fall, has separately piled up DuPont stock options worth $7 million, which could be worth more if the merger and breakup plan succeeds in boosting his company's lagging share price.
The name "Breen" became a verb - breening, breened - for job cuts in Wilmington this winter, as the boss announced 1,700 departures in and around DuPont's Delaware headquarters, central research, engineering, management, and support services.
The filing details how Breen's predecessor, Ellen Kullman, launched merger talks with Dow in the fall of 2014, six months before she narrowly beat back an insurgent board of directors challenge led by hedge fund boss Nelson Peltz, whom Kullman supporters accused of scheming to break up the company. Talks accelerated after Breen replaced Kullman as CEO in October.
While planning their reorganization, DuPont and Dow said, each has "received a request for additional information and documentary materials" from the U.S. Department of Justice Antitrust Division regarding the mergers, adding that this could delay the deal.
The companies said they expected the request and will "respond promptly."
Separately, DuPont says it has hired former U.S. Deputy Agriculture Secretary Krysta Harden as its vice president of public policy and chief sustainability officer. She replaces Linda Fisher, who had held the job since 2004 and was, DuPont says, the first such officer at a major company.
Harden "will have a full plate," spokesman Daniel Turner said, when asked whether her USDA experience was especially important as the company combines its agriculture operations and faces antitrust scrutiny.
In another sign that DuPont is paring corporate overhead, workers in the company's agricultural unit say the company has suspended Greenbelt Six Sigma training, one of several corporate-wide management schemes that central bosses had imposed on business units in recent decades to boost performance.
The company froze wages and suspended merit bonuses for 2015. "These were difficult but necessary decisions," Turner said. "DuPont is a performance-based culture, and our merit pay and short-term incentive compensation impact reflects that."
What about 2016? "Coming out of the fourth quarter, we are making strong progress."
Employees have also told the Inquirer that company officials are discussing demolishing some of the partly vacated labs at the company's Experimental Station research center west of Wilmington, and consolidating some of Dow's former Rohm & Haas researchers from suburban Philadelphia to Delaware. Turner called all such reports "rumors" and said the companies still have a lot of planning ahead.
DuPont officials have said they hope the reorganization makes it easier to move promising new technologies to market without some of the delays that complicated past decision-making.