Today shareholders at Black & Decker will consider a merger with the company’s rival Stanley Works. At a 22% premium, such an offer will be hard to pass on. So it seems like the perfect opportunity for the board of directors to grant BDK CEO Nolan Archibald a tidy pay package of $89 million. Included in the payout is a “cost synergy bonus” of more than $45 million if the company meets certain cost reductions (can you say “LAYOFFS”?). Mr. Archibald, a 1% owner of the company’s stock will do quite nicely without the out-sized pay package.
In the Friday edition of the Wall St. Journal, it is reported that the New York Stock Exchange has raised questions about the independence of one of the directors on the company’s board – Anthony Burns. It seems that Mr. Burns as some significant personal business dealings with CEO Archibald that were somehow overlooked in the company filings with the SEC.
While it seems unlikely that the Big Board will do anything in response to this disclosure about this conflict, it speaks volumes to yet another example of boards failing to act in the best interests of company shareholders.
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