‘Golden Parachutes’ Cushion Ousters

Executives--especially those who had a hand in beginning a successful company--are often concerned about their fate should a voracious corporate raider buy control of the firm and toss them out.

So in droves companies are executing change-of-control agreements--often called “golden parachutes”--with their top people as a means of assuring them that they will be taken care of, should the worst happen.

A review of several hundred corporate proxy reports this year shows that the typical agreement calls for the ousted executive to receive a sum equal to about three times the average of the previous three to five years in pay and bonuses.

But over at ICN Pharmaceuticals, Chairman Milan Panic’s contract calls for him to get five times his annual salary if he leaves within two years of a change of control for any reason other than death, illness or disability.

Panic would also immediately be deemed to have retired, according to the agreement, and would be eligible to invoke a clause that lets him sign on as a consultant--at an annual fee of $330,000, adjusted each year for inflation.

The Costa Mesa drug company obviously believes that bigger is better. It was ICN, after all, that awarded Panic $5.4 million in stock in a subsidiary last year to make him the county’s best-paid executive for 1991, with a total gross of $6.1 million.