Lucrative Package for Outgoing Bank of New York Mellon Chief

Theo Francis The New York Times 09/01/2011 08:03

Robert P. Kelly stands to collect tens of millions of dollars on his way out as chief of Bank of New York Mellon, a figure unlikely to be dented by a successful shareholder initiative last year that sought to limit executive severance at the company.

The bank said Wednesday that Mr. Kelly was stepping down because of “differences in approaches to managing the company.”

The company isn’t expected to disclose how much Mr. Kelly will receive in severance for at least a day or two, but the sum is likely to hinge on how his departure is characterized for contractual purposes. That determination typically reflects negotiations between lawyers for each side as much as any underlying reality.

Company regulatory filings suggest that Mr. Kelly could be eligible for as much as $36.6 million in cash, stock and continued benefits if his departure is considered a termination by the company without cause. The terms of Mr. Kelly’s employment, as with most executive contracts, largely limits cause to serious infractions like dereliction of duty or conviction of a crime.

By contrast, if Mr. Kelly is considered to have quit for “good reason” — a category that generally includes involuntary demotion or pay cuts — he could receive as much as $20 million. A simple resignation, rarely seen when executives are forced out over company performance, would bring Mr. Kelly about $5.5 million from faster vesting for some equity awards.

Separately, Mr. Kelly is eligible to collect a pension that was valued at more than $15.1 million as of Dec. 31.

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