AbitibiBowater CEO Paterson gets nearly US$4-million golden handshake
MONTREAL - AbitibiBowater's departing chief executive will receive a golden handshake likely worth almost US$4 million by the time he leaves the forest products company next summer, according to a U.S. regulatory filing.
David Paterson has been given a severance package worth more than US$1.3 million, an additional US$765,000 for his restructuring work, a US$382,500 bonus if the company meets its profit target for the first six months of 2010, US$430,000 in lieu of stock awards and up to $35,000 in legal fees to negotiate the deal.
The 56-year-old Georgia native will also be paid US$150,000 a month, or an additional US$900,000, as a consultant for the six months after he formally leaves his position on Jan. 31.
In addition to Paterson, four other AbitibiBowater senior executives are splitting nearly US$4 million in cash and stock for their efforts in helping the forest products company restructure its operations and exit 20 months of creditor protection.
The others would have to proportionally repay their awards if they cease employment with the company due to resignation or termination for cause in the 12-month period following Abitibi's emergence from bankruptcy protection. But Abitibi has decided to pay Paterson the full amount.
Chief financial officer William Harvey and human resources vice-president Alain Grandmont each received US$993,438 in restructuring awards, including US$451.563 in stock awards.
Pierre Rougeau, executive vice-president of paper operations and sales, got US$1.05 million, including US$478,125 worth of stock awards.
Chief legal officer Jacques Vachon received US$794,750, including US$361,250 in stock.
Altogether, the five senior executives will receive US$2.16 million in restructuring awards and US$1.08 million in profit bonuses, as well as the stock awards.
The figures did not include undisclosed restructuring awards to be provided to 35 other executives.
AbitibiBowater also awarded each non-employee director stock options valued at US$100,000. Chairman Richard Evans was also granted a US$150,000 cash award.
Meanwhile, Paterson's replacement, Richard Garneau, 63, will receive a base salary of US$765,000, a profit bonus estimated at US$765,000, stock options worth US$1.72 million, a club membership, five weeks vacation and a $16,000 allowance.
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