Of all the posh and luxurious Christmas gift ideas that crossed my desk this holiday season, none has been able to top the decision by Freeport-McMorRan Copper & Gold (FCX) to give an aging CEO a $36 million pre-retirement bonus.
In a statement released to the press on December 23rd, Freeport’s board announced that it was terminating Richard Adkerson’s old contract, and replacing it with another, and in turn, giving him a million shares of Freeport stock.
“He’s 66 years old,” grumbles David Nelson, chief strategist at Belpointe Advisors in the attached video. “I don’t think he’s going to be fired. He’s probably likely to retire in the next couple of years,” he says, adding that “it seems like a pretty good deal.”
To be fair, Adkerson’s conversion to an ‘’at-will’’ employee means he no longer gets a $2.5 million base salary, and also surrenders a $100 million severance and/or acquisition clause should he or the company get hit by lightning, so to speak.
The award also comes at a time when the stock lagging both the price of gold, and the broader stock market, having slumped 40% in three years compared to an 18% drop in gold and a 45% increase in the S&P 500 (^GSPC).
He’s not the only gift recipient this holiday season, Nelson says, pointing to the $14 million final payout Occidental Petroleum (OXY) just awarded to former chairman and CEO Ray Irani, which includes $1.3 million in annual costs for personal security for life, as well as a parking spot at company HQ.
While that might seem small compared to Adkerson’s gift, it needs to be noted that Irani’s total compensation during his 20 years at the 4th largest oil company topped $1.2 billion, or an average of $54 million a year! That might explain why he needs protection… if only from angry shareholders.
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