1) Jack Welch
> Company: General Electric Co. (NYSE: GE)
> Package: $417 million
> Market cap today: $236 billion
Jack Welch is deemed to be one of the most visionary CEOs of modern business. He also reigned at GE during the best growth years in America that were not just due to post-war recoveries. Welch joined GE in 1960 and rose through the ranks. From 1981 to 2001 he led GE as CEO and chairman, and GE shareholders saw gains measured literally at about 50-times their investment. Welch was such a great CEO for investors that current CEO Jeff Immelt has had to live in Jack Welch’s shadow. Welch’s exit package was projected to be more than $400 million at the time, although his exit was literally a week before the September 11 terrorist attacks in 2001, and the value of that package may have drifted lower during the recession that followed. Jack Welch made many acquisitions to grow GE, and he had no qualms about using layoffs and consolidation to drive profits, along with the Six Sigma approach. GE predated Welch’s tenure by about 90 years to the 1890s and was among the first constituents and only remaining original component in the Dow Jones Industrial average.
2) Lee Raymond
> Company: Exxon Mobil Corp. (NYSE: XOM)
> Package: $320 million (or more)
> Market cap today: $410 billion
Lee Raymond joined Exxon back in 1963 and was chairman and CEO of the combined Exxon Mobil from 1999 to 2005 after the giant merger he orchestrated. But he dated back as CEO of Exxon to 1993 and had been a director and officer back in the 1980s. We count his CEO tenure as being 1993 to 2005. During that time, Exxon investors saw their shares rise from under $10 to more than $50 in today’s dollars, with large dividend gains along the way. Exxon Mobil has grown to be so large that it was not until 2012 that Apple Inc. (NASDAQ: AAPL) beat it out for the largest company status. Raymond was able to get the Mobil acquisition through even under the Clinton tenure Department of Justice, when some mergers were actually scrutinized. What matters here is that Exxon dates all the way back to the days of Standard Oil from the 1880s. GMI listed Lee Raymond’s retirement package at about $320 million, but other reports in 2006 after Raymond was succeeded by Rex Tillerson put that figure at $400 million or more.
3) William McGuire
> Company: UnitedHeath Group Inc. (NYSE: UNH)
> Package: $286 million
> Market cap today: $58 billion
If you love your health care insurance premiums rising every single year, you will love the empire-building retirement package for Mr. McGuire. Investors loved McGuire, as UnitedHealth’s stock rose about 50-fold from 1991 to 2006. McGuire did orchestrate UnitedHealth’s move to become the biggest health care insurance provider by combining what were a bunch of regional mergers over and over. McGuire joined United HealthCare in November 1988, he became CEO in 1991 and retired in 2006. His shocking retirement package did not face the public scrutiny that would have arisen had this happened after health care reform efforts took shape under the Obama administration. If you thought that the attacks were bad on bankers, imagine how much publicity and outrage would have come over him walking away with close to $300 million. McGuire’s acquisition machine gobbled up Pacificare, Oxford Health, MetraHealth and others. The first part of the big AARP-sponsored deal also dates back to McGuire’s tenure, but this company’s formation dates back to the mid-1970s after being founded as Charter Med Inc.
4) Ed Whitacre
> Company: AT&T Inc. (NYSE: T)
> Package: $230 million
> Market cap today: $198 billion
The AT&T of today is far different from the AT&T of the past. Ed Whitacre led a lot of the changes, though he was not CEO when the AT&T breakup of the 1980s came about. He became president of SBC (or Southwestern Bell, the real AT&T of today) in 1988, but his career in the telecom outfits goes back to the early 1960s. His chairman role began in 1990, so the dates sound a bit fuzzy when you look at the M&A trail. Whitacre led the acquisition charge, gobbling up Cingular, Pac-Tel, Ameritech, Bell South and ultimately AT&T before recapturing the AT&T name. Whitacre also was very vocal in ISP and Internet giants, getting a free-ride through the major telecom data pipes. Investors appear to have made more than five times their money, but the AT&T M&A trail makes the real calculations difficult. His M&A efforts did bring lots of added wealth to hundreds of thousands (or more) with his buyouts. AT&T is even based in “Whitacre Tower.” GMI put his exit package as being worth some $230 million, but Whitacre did not hang up his racing shoes for very long. He went on to help lead General Motors Co. (NYSE: GM) in its darkest hours of the recession, and he even joined the board of directors for Exxon Mobil. While Southwestern Bell goes back to the AT&T breakup of the 1980s, the original American Telephone & Telegraph dates back to about 1885.
5) Robert Nardelli
> Company: Home Depot Inc. (NYSE: HD)
> Package: $223 million
> Market cap today: $100 billion
The tenure of Bob Nardelli as CEO of Home Depot did not end well. In fact, things were so bad that he was on the first list of CEOs that 24/7 Wall St. called on to be fired. CNBC even ran him as one of the worst CEOs of all time. So how he got a $223 million exit package may seem like a mystery. How this came about was that Home Depot took Nardelli on after Jeff Immelt beat out several Jack Welch replacement candidates to run General Electric. Nardelli was charged with destroying the culture of Home Depot, and his efforts to move the salespeople from earners with upside into hourly workers was yet another example of where cost cuts at all costs did not go the way everyone hoped. Home Depot investors made no real money under Nardelli’s tenure, but his prestige at GE allowed him to dictate very favorable terms if things went south. Nardelli ended up going to private equity and even to Chrysler, and his later salaries other than $1 were not public at the time. This was one of the very dubious packages, but it is also a lesson that companies need to learn about negotiating with CEO candidates bringing a great history with no direct experience where they are landing.