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Buffett’s Takeover Gives Lubrizol Chief $97 Million Payout

Warren Buffett’s $9 billion takeover of Lubrizol Corp. (LZ) is scheduled to reward Chief Executive Officer James Hambrick with about $97 million in cash tied to his equity-based compensation.

Hambrick, 56, may receive cash payments of about $73 million on his stock options and about $24 million on his so- called performance-share units, Lubrizol said in a March 25 regulatory filing. Hambrick, who also serves as chairman, accepted the $135-a-share acquisition from Buffett’s Berkshire Hathaway Inc. (BRK/A) this month.

Buffett, 80, called Hambrick “a talented CEO” and said he plans to leave the manager in charge after Omaha, Nebraska-based Berkshire completes the purchase. The takeover price was 28 percent higher than Lubrizol’s stock on the last trading day before the deal was announced March 14. Lubrizol closed at $32.60 on April 26, 2004, the day Hambrick was promoted to CEO.

“Lubrizol’s board has supported and approved the change- in-control agreements that it deemed necessary and appropriate in attracting and retaining top talent,” the company said today in a statement. “These agreements, if they are triggered in connection with the merger agreement with Berkshire Hathaway, will be honored.”

Source: Lubrizol Corp. via Bloomberg

Lubrizol Chief Executive Officer James Hambrick. Close

Lubrizol Chief Executive Officer James Hambrick.

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Source: Lubrizol Corp. via Bloomberg

Lubrizol Chief Executive Officer James Hambrick.

To contact the reporter on this story: Andrew Frye in New York at afrye@bloomberg.net

To contact the editor responsible for this story: Dan Reichl at dreichl@bloomberg.net

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