(Washington, DC) Three top Darden executives are leaving the embattled restaurant corporation with compensation valued at an estimated $68 million, according to a new Institute for Policy Studies report.
CEO Clarence Otis, Jr., whose resignation announcement on July 28th sent the company’s stock price soaring, will depart with compensation and retirement funds currently worth an estimated $36 million.
Darden will hold its annual shareholder meeting October 10th amidst a bitter control fight. The world’s largest full-service restaurant corporation, Darden owns Olive Garden, Longhorn Steakhouse, and several other chains.
As pressure from an activist hedge fund has mounted over the past year, the board pushed Otis and two other executives — COO Andrew H. Madsen and Chief Restaurant Operations Officer David T. Pickens —to resign. The IPS report, Darden’s Golden Goodbyes, is the first detailed analysis of their generous separation agreements, which include cash severance, continued vesting of equity-based compensation, and numerous perks.
Meanwhile, Darden workers are facing heightened insecurity. The company pays at least 20 percent of its hourly workforce no more than the $2.13 per hour federal minimum for tipped workers. Now these workers face even greater uncertainty, with the Starboard Value hedge fund pushing for deep cost-cutting. Many workers are petitioning for a seat at the table in negotiations over the company’s fate.
“Golden goodbyes for under-performing executives are a long-standing problem in corporate America,” notes report author Sarah Anderson, who directs the Institute’s Global Economy Project. “It’s an even bigger problem when their workers’ rock-bottom wages make it nearly impossible to put anything aside for their own futures.”
Link to report and related infographic: http://www.ips-dc.org/dardens-golden-goodbyes/
The Institute for Policy Studies (IPS-DC.org) has conducted path-breaking research on executive compensation for 21 years. Recent related reports “Restaurant Industry Pay: Taxpayers’ Double Burden” and “Executive Excess 2014: The Obamacare Prescription for Bloated CEO Pay” received significant media coverage, including in CNN, Washington Post, Fortune, Reuters, CBS News, WSJ Marketwatch, Marketplace, and Politico
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