Diageo’s boss leaves with a meaty bank balance
They did not use the derogatory term “fat cat” – but this seems to be the implication of a Sunday Times piece on Paul Walsh, CEO of Diageo. On 26 May 2013 the UK’s Sunday Times newspaper reported that Diageo’s departing CEO is to receive one of the biggest-ever farewell packages valued at GBP 50 million (EUR 58 million/USD 75 million).
The 58-year-old Mr Walsh will step down as CEO of Diageo, the maker of Johnnie Walker and Smirnoff, at the end of June and will remain on the board until September. He is due to retire in June next year, after completing a handover to his successor, Ivan Menezes.
The "golden goodbye", according to the Sunday Times, could be one of the most lucrative in British corporate history. Mr Walsh, who has been Diageo’s CEO for the past 13 years, holds stock worth GBP 15.5 million, using Diageo’s share price of GBP 20.19 at the end of May 2013.
In addition, he also has share options with a theoretical value of GBP 11.7 million. Apart from that, he has a pension pot stuffed with GBP 19.2 million, which will generate an annual payment of GBP 578,000, says the Sunday Times.
Investors may argue that Mr Walsh is worth all this money since he helped transform Diageo from highly diversified consumer goods giant into the world’s leading drinks group. It will not be forgotten that, under his stewardship, the company’s market value has climbed by GBP 30 billion.
