Richard Bready, chairman
and chief executive officer of Nortek Inc., stands to receive
$90.6 million in the $1.6 billion buyout of the home and building
products maker by Kelso & Co.
Bready plans to sell part of his 16 percent stake in
Providence, Rhode Island-based Nortek for $17.2 million, according
to a filing with the U.S. Securities and Exchange Commission. The
payment includes $73.4 million from a change-of-control provision
in an executive retirement plan, the filing said. The company may
be required to pay his taxes on the payment as well.
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Bready will receive the payment while keeping his job under a
new five-year contract with a $2.5 million salary, up from his
$1.1 million base pay this year. He also will be eligible for
annual bonuses of as much as $5 million based on Nortek earnings,
the filing said.
“It’s unusual to actually pay these amounts out immediately
upon a change of control” when an executive isn’t leaving the
company, said Carol Silverman of Mercer Human Resources
Consulting. She emphasized that she was speaking of executive
retirement plans in general, not Nortek specifically.
Large payouts are drawing more scrutiny, Silverman added,
following scandals over corporate largess at companies such as
Enron Corp., WorldCom Inc., Tyco International Ltd. and Adelphia
Communications Corp.
Nortek makes home and building products such as NuTone fans,
Great Lakes windows, vinyl siding, and heating and air
conditioning systems. It agreed in June to a sweetened buyout of
$46 a share by Kelso, a New York-based private investment and
buyout firm.
Bloomberg News
