
General Electric’s longtime chief executive Jack Welch is famous for, among other things, having a severance that exceeded $400 million more than two decades ago. Welch’s successor, Jeff Immelt, was given more than $200 million when he retired in 2017.
CEOs today are generally given much smaller severance packages and 'golden parachutes' — awards given to executives let go after a corporate takeover. But many are still able to collect millions in case they lose their jobs.
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Ten local executives had severance packages of at least $20 million in their most recently reported fiscal year, according to a Boston Business Journal review of chief executives who lead the state’s largest companies by revenue. The largest is for Vincent Roche, the CEO of Analog Devices over the past decade. He'll make $72 million if he's let go without cause or wrongdoing.
Severance packages often come with eye-popping numbers, but Charles Tharp, a professor at Boston University’s Questrom School of Business, said they're used infrequently.
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“It’s like homeowners' insurance in a way, that hopefully you never use it and you rarely use it,” he said. “This is a hypothetical number. Unless you’re fired, you don’t get it.”
Numbers are typically higher in the rarer instance that a company's majority ownership changes hands, such as in an acquisition. In that case, GE's Lawrence Culp, the CEO since 2018, would be paid $97 million.
Such sums are necessary, Tharp said, to attract top candidates, just as a high salary and stock options and awards do.
Boston Business Journal
Click here to see the full list in the Boston Business Journal