April 18 2016

Jarden Shareholders Overwhelmingly Reject Merger-Related Compensation for Executives

Newell Rubbermaid completed their acquisition of Jarden Corp on April 15, 2016.  Shareholders 98.77% of votes were in favor of the merger that would create one of the largest non-durable goods manufacturers.

However, shareholders shared a very different view of the compensation packages that are to be paid to Jarden executives.  Only 33.94% of votes were in favor of the golden parachutes that will be potentially paid out to company execs.

The Cash and Perquisites will only become payable to Jarden executives if they are subsequently fired after consummation of the deal.  The Equity payments, however, will become effective upon closing of the transaction.  These payments total more than $325 mil for the top 6 executives, including $150 mil payable to Executive Chairman Martin Franklin.

The shareholders' vote to approve the merger-related compensation is a non-binding vote.  So, while there is disapproval of the packages, little can be done to uphold the vote.  The agreements, which are contractual are usually agreed upon in severance/employment plans, and therefore, not binding to a shareholder vote.

Since the SEC made say-on-pay votes mandatory inn 2011, there have only been 12 U.S. public M&A transactions in which the compensation vote approval fell below 40%.

Data provided by Spectrum Analytics LLC