Dr Brian McNamee, the outstanding just-retired CEO of blood plasma and vaccine company CSL (ASX: CSL) stepped down from the position he has held for 23 years last week. As highlighted here, under Dr McNamee's watchful eye, CSL has provided shareholders with unparalleled returns.
To the CSL board's credit, upon retirement the board issued a detailed explanation of the benefits and terms of Dr McNamee's departure. Those details included his accrued annual leave and long-service leave entitlements of approximately $2.1 million, a severance payment of $2.8 million, and an explanation of short- and long-term incentives Dr McNamee will be eligible to receive in future years. If all goes to plan for Dr McNamee, the long-term incentives should be worth around $20 million once they all vest and are exercised.
Also making news this week was the salary package of incoming CEO of Seven Group (ASX: SVW), Mr Don Voelte. Mr Voelte who was until recently Chairman at Seven West Media (ASX: SWM), will receive a base salary of $3.2 million, with the potential to earn a bonus worth 75% of his base salary.
Foolish takeaway
While the size of a CEO's salary can often appear incredulous, when that salary has truly been linked to outstanding performance and the creation of shareholder value — as has been the case with McNamee and CSL — shareholders are likely to consider it money well spent. However when a CEO receives huge sums for mediocre or poor performance, that is infuriating and an unjust result for shareholders.
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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.
