Chubb Corp. Chief Executive Officer John Finnegan could walk away with at least $92.7 million if he’s terminated after ACE Ltd. acquires the company.
Finnegan, who’s run the insurer since late 2002, would be eligible to receive $20.5 million in cash severance and benefits worth $555,655 if he’s let go after the acquisition, according to the Warren, New Jersey-based company’s most-recent proxy filing. He’d also get $35.3 million in pension benefits and equity awards valued at $36.4 million at the $124.13 offer price, according to data compiled by Bloomberg.
Chubb shareholders will receive $62.93 in cash and 0.6019 share of ACE stock for each share they own, the companies said Wednesday in a statement. ACE CEO Evan Greenberg, the son of former American International Group Inc. CEO Maurice “Hank” Greenberg, will assume leadership of the new entity, which will take the Chubb name.
Mark Schussel, a spokesman for Chubb, didn’t respond to a call and an e-mail seeking comment.
Chubb will also pay any excise taxes Finnegan would be due on his golden parachute, according to the proxy filing. The company didn’t provide an estimate for the payment.
Finnegan, who was set to retire at the end of 2016, would receive the payout if he’s terminated without cause or resigns for reasons including a reduction in his responsibilities or a cut in his compensation after Ace’s takeover.
2014 Award
Finnegan was awarded $20.5 million last year, according to the Bloomberg Pay Index, a daily ranking of the highest-paid U.S. executives that values pay as of a company’s fiscal year- end. He joined the insurer, which covers corporate boards, yachts, collector cars and wines, as CEO after working at General Motors Co.’s financing division.
Chubb has more than doubled in the past 10 years, even before shares surged today, beating the Standard & Poor’s 500 Index and also rivals in the financial-services industry, a group that declined in that period.
He steered the company through the financial crisis without requiring a bailout, and criticized the U.S. for aiding his competitors.
“The opportunities for financially strong companies to absorb the business of weakened competitors were initially compelling,” Finnegan said in a letter to shareholders in 2010. “This is as it should be in a free market unimpeded by federal intervention. But the willingness of the federal government to prop up weakened competitors by artificially injecting capital is troubling.”
–With assistance from Caleb Melby, Sonali Basak and Selina Wang in New York.