Honeywell president and CEO Darius Adamczyk, who succeeded form CEO David Cote on March 31, 2017 had a total disclosed compensation (TDC) of $16,500,153. Cote who continued to serve as Executive Chairman after relinquishing the CEO post had a TDC of $20,955,539. But the most amazing compensation at Honeywell doesn’t show up in the summary compensation table. In October 2017, Cote received a lump sum of $75 million “representing the present value of Mr. Cote’s pension and surviving spouse benefits under the SERP.”
That $75 million comes at a cost not only to shareholders, but to taxpayers – Honeywell is a large government contractor.
Honeywell, because its preliminary proxy filing was one of the first ones out of the gate, received some press attention for the CEO to median pay ratio of 333:1. When calculating that figure the company “elected” to use Adamczyk. The ratio would have been higher if they had used the Cote figure. The median pay was $50,296. Since we have access to that data I ran another calculation. The ratio of Cote’s retirement to the salary of a median employee would be 1,491:1.
Last year a number of shareholders voted against the pay package at Honeywell because the company excessive perquisites, including an inordinate amount of personal use of corporate aircraft. For 2017 – during which Cote was CEO for only four months – the cost of his use of company aircraft for personal business was $430,060.
In June 2016 Cote signed “Continuity Agreement” which becomes effective April 2018 when he leaves the paid executive chair position. It notes that while he serves on the board he will continue to have a paid assistant and receive tech support. After he retires from the board he gets a 20 year timeshare lease on company jet. He will reimburse the company for use, but it is not clear to me whether the reimbursements will truly cover the cost to shareholders.
In any case, Cote’s lump sum retirement payment of $75 million seems enough that he cover all the first class flights a person could want. As I said when I wrote about Honeywell in 2016, The point isn’t “that the sum is truly significant for the balance sheet of Honeywell, or for that matter, of Cotes. The point is what such benefits say about the CEO and the board and the power differential between them.”
We shall see what happens under the new CEO.
These are only a few of the factors of concern with pay at Honeywell.