Jarden's Franklin Sees 'No Shame' in Payout After Newell Deal

  • Chairman stands to receive $133 million from sale of company
  • A `classic case' of aligning incentives and value, he says

Jarden Corp. Executive Chairman Martin E. Franklin, who stands to take home $133 million for the sale of his company to Newell Rubbermaid Inc., says his compensation has been a “classic case” of aligning incentives.

“I have a problem when you see value destructors get paid a lot of money,” he said in a televised interview with Stephanie Ruhle and David Westin on “Bloomberg ‹GO›.” “But we have created a lot of value for a lot of people and have no shame.”

Jarden agreed to sell itself to Newell this week for about $15.4 billion. Franklin, 51, will join the combined company’s board as a director and no longer serve as executive chairman. The change in control triggers full vesting of all outstanding equity awards, regardless of whether performance criteria for the awards were met.

Franklin, who stands to take home $133 million for the sale of his company to Newell Rubbermaid, says his compensation has been a "classic case" of aligning incentives.
Franklin, who stands to take home $133 million for the sale of his company to Newell Rubbermaid, says his compensation has been a "classic case" of aligning incentives.
Photographer: Chris Goodney/Bloomberg

Franklin’s unvested equity awards and cash severance are valued at $133 million at the implied $60.03 offer price, according to data compiled by Bloomberg from company filings. Most of that value is derived from a stock grant Jarden valued at zero because the company deemed it unlikely to be earned.

Franklin also is the fourth-highest compensated person on the Bloomberg Pay Index, which tracks the 200 highest-paid U.S. executives. Jarden disclosed compensation of $22.4 million for him in 2014, excluding the award.

But unlike some executives, Franklin has rewarded investors, he said on Thursday. Since he joined Jarden 14 years ago -- and began building it into a consumer-products giant -- the stock has climbed about 5,400 percent. The shares have risen 20 percent this year through Wednesday.

“I do believe in alignment of management and incentive, and we’re a good classic case of that,” Franklin said.

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