Kemper Execs Have Generous Severance Plan : Takeover: The top 13 managers are protected by golden parachutes worth $19 million, a plan passed when directors rejected GE Capital’s bid.

The top executives at Kemper Corp. may be tempted to sell the company--the target of a hostile $2.35 billion takeover by GE Capital Corp.--because they have golden parachutes worth more than $19 million, analysts said Tuesday.

“This will help cushion the blow to Kemper management if GE takes over and it may also preclude Kemper from fighting for control,” said Michael Lewis, an analyst with Dean Witter. “It won’t stop GE from moving forward.”

The rich compensation plan for the top 13 executives takes effect in the event the company is sold.

It was adopted by Kemper’s executives on March 17, when its board unanimously rejected a proposal by the General Electric Co. unit to buy Kemper for $55 a share, calling it a “low ball” offer.

The Long Grove, Ill.-based asset management firm disclosed the existence of the golden parachutes in a proxy statement sent Monday to shareholders. The plan does not need shareholder approval.

“The fact that (Kemper’s management) can cash out any time reduces their incentive to hold out for a higher bid,” said Mark Mitchell, a University of Chicago finance professor.

That’s because Kemper’s directors and executive officers hold a relatively small stake in the company, he said.

According to the proxy statement, 11 out of 15 directors and executives held less than 1% of Kemper’s shares as of Feb. 1. The biggest stake any single individual held was 4.6%.

“It’s just protection for management in case they lose the battle,” Lewis said. “My guess is that there would be a pretty good housecleaning if GE took over.”

The compensation plan is evidence that Kemper’s management is coming to the realization that GE, flush with cash, is eventually going to get what it wants, said one shareholder who asked not to be identified.

“But the company shouldn’t enrich management at shareholders’ expense,” he added.

“The golden parachutes seem to be a little excessive,” said Luther Jones, manager of corporate affairs for the Florida State Board of Administration, which holds almost 500,000 shares. “It’s an issue we do want to talk to the company about.”

Kemper’s shares were off 37.5 cents at $60.625 at the close of trading on the New York Stock Exchange, and General Electric’s stock was down $1.875 at $102.375.