Tuesday’s $10 billion merger will mean big bucks for some top stock exchange executives – even ones who don’t join the new company.
Frankfurt’s Deutsche Boerse said Tuesday it will take over the NYSE’s parent, NYSE Euronext NYX, creating the biggest global stock and derivatives trading platform. The deal also stands to make some top NYSE execs rich as they cash in on provisions in their employment contracts that pay out when the company is sold.
The NYSE’s CEO, Duncan Niederauer, could have collected as much as $29 million in so-called change-in-control payments had he left the company, according to the NYSE’s proxy statement last spring. But he will be staying on as CEO of the combined company, whatever its name ends up being.
An NYSE spokesman says Niederauer has “the intention to sign a new four-year contract” and doesn’t plan to collect any change in control payments. He didn’t offer any details, but the new contract will likely put Niederauer’s annual compensation into the low eight-digit range.
Niederauer, listed in last March’s proxy statement as 50 years old, made $7.3 million in 2009, $9.2 million in 2008 and $7.6 million in 2007, according to the NYSE’s filings with the Securities and Exchange Commission.
There are signs that two other prominent NYSE executives – Chief Financial Officer Michael Geltzeiler and European execution head Roland Bellegarde – won’t be joining the combined company. A press release issued Tuesday didn’t mention them, and named Deutsche Boerse executives as the new firm’s chief financial officer and heads of market data and settlement.
The NYSE spokesman said no decisions have been made about the roles Geltzeiler and Bellegarde might play in the combined company, and that announcements on that subject will be made closer to the deal’s completion, presumably later this year.
But assuming the executives do leave, they will be handsomely compensated for their time. Both made around $3 million in 2009, according to the NYSE’s proxy statement.
But under the change in control provisions in his contract, Geltzeiler could walk away with $8.7 million – including $3 million in severance pay and $1.7 million in payments to offset golden parachute taxes. Bellegarde, who isn’t named in the proxy as having a contract and wouldn’t get severance, could still get $3.8 million, largely in the vesting of existing equity awards.