Severance Package

Legg Mason said Wednesday that it has agreed to a severance package for outgoing CEO Mark R. Fetting that will cost the Baltimore money manager about $4 million, including $2 million in direct payments. Fetting is stepping down as CEO and chairman Oct. 1. The newly disclosed separation agreement entitles him to $2 million in payments made over 15 months and allows him to keep 111,548 unvested restricted shares of company stock, which will vest under the same timetable as if he weren't leaving.

Legg Mason said Wednesday that it has agreed to a severance package for outgoing CEO Mark R. Fetting that will cost the Baltimore money manager about $4 million, including $2 million in direct payments. Fetting is stepping down as CEO and chairman Oct. 1. The newly disclosed separation agreement entitles him to $2 million in payments made over 15 months and allows him to keep 111,548 unvested restricted shares of company stock, which will vest under the same timetable as if he weren't leaving.

The recession is buffeting your business and you've done everything in your power to keep from cutting personnel, but the dreaded prospect of layoffs now appears unavoidable.It's going to hurt your displaced employees. There's no way you can prevent that. But a well-designed severance package not only can cushion the blow for the people you must lay off, it can also help preserve your company's reputation as a compassionate employer -- a vital asset when good times return and you can hire again.

Engineering and manufacturing company ITT Corp. is closing an Anne Arundel County location it opened just last summer, cutting 48 jobs. The company's information-technology center in Hanover will be shut down by the end of the year as ITT splits into three separate companies and will no longer need shared IT support, spokesman B.J. Talley said Wednesday. He said 48 employees will either be laid off or will leave voluntarily with a severance package, while about 20 are being transferred to other divisions.

On the eve of announcing that a New York police commander will be the city's next top police officer, Baltimore Mayor Martin O'Malley said last night that he regretted what he characterized as a "sweetheart" severance package given to former Police Commissioner Edward T. Norris. Kevin P. Clark is expected to be introduced as the new commissioner today, sources close to the mayor said. O'Malley's comments regarding Norris were further evidence of increasing strains in the once warm relationship between the mayor and his former commissioner, whose three-year tenure in the job ended last month when he joined the Maryland State Police as superintendent.

International Paper Co. said yesterday that it laid off 78 people at its Odenton plant because of falling demand for the products manufactured there. The plant, which now has 510 employees, makes laminates for kitchen and bathroom countertops. "It's kind of rough because we've never seen a layoff of this magnitude," said Bryan Allen, president of the United Steelworkers of America Local 679, which represents workers at the plant. He said the layoffs were made according to seniority and that the union and the company are still discussing what type of severance package will be offered.

NEW YORK - Merrill Lynch & Co. said yesterday that it is offering its 65,900 employees a severance package that may be worth more than one year's salary as leaders of the biggest securities firm accelerate cost-cutting efforts. Employees will have between Monday and early November to accept the offer, said spokesman Joseph Cohen. Those who decline the offer, the first of its kind at the 116-year-old firm, risk being fired in the drive to shore up earnings. "There are probably a few stressed-out people who might take them up on that," said Geoff Hance, an analyst at Northern Trust Corp.

Corvis Corp. added its name yesterday to the list of telecommunications companies that will be reducing payroll in the thick of an industry slowdown. The Columbia-based maker of fiber-optic equipment announced that it would cut 250 positions, or about 15 percent of its work force. The company will give employees the option of leaving voluntarily in exchange for a severance package. "This is one part of our overall reduction, if you will, streamlining costs," said Andy Backman, director of investor and public relations for Corvis.

WASHINGTON -- Alexander & Alexander Services Inc. President and Chairman Frank Zarb will leave the company after it merges with Aon Corp., taking at least $12 million in cash as part of his severance.The company disclosed in a filing with the Securities and Exchange Commission that "the employment of Frank Zarb with the surviving corporation shall be terminated without cause" after the merger.Aon announced last week that it would purchase Alexander & Alexander for $1.23 billion, creating one of the nation's largest insurance brokerage companies.

WASHINGTON -- A woman who took a company's severance package and promised not to sue should be able to keep the money, even though she later filed suit for discrimination, a Clinton administration lawyer told the Supreme Court yesterday.In an important case in an era of corporate downsizing, lawyers arguing on behalf of Dolores Oubre told the court that she signed an illegal agreement not to sue, and, therefore, was entitled to keep all of her severance package.As several justices noted, the case could affect millions of workers who accept buyouts on the condition that they will not later sue for discrimination.

William L. Jews is entitled to only half of his $18 million severance package from CareFirst BlueCross BlueShield, Maryland's top insurance regulator said yesterday in a ruling that accuses the former chief executive of abandoning the insurer's nonprofit mission. In a 65-page order, state Insurance Commissioner Ralph S. Tyler wrote that CareFirst's board had violated a 2003 state law requiring executive pay for the nonprofit to meet a "fair and reasonable" standard. The decision marks the first test of the law, which was passed by legislators furious with Jews for trying to convert CareFirst to a for-profit entity and sell it to a California company.

Corporate pay critics were prepared to cheer the abrupt departure of embattled Home Depot Inc. chief Robert Nardelli yesterday - but then they got a look at the bill. Nardelli, who was one of the nation's best-paid chief executives, will get a severance package valued at $210 million. That dismayed corporate watchdogs who have seen a string of departing CEOs collect high-dollar payouts in recent months. "This board should be ashamed of themselves," said Nell Minow, an expert on executive compensation at the Corporate Library research firm.

DALLAS -- David Edmondson leaves RadioShack Corp. with a black eye for enhancing his resume. His reputation also took a blow from the 25 percent plunge in the retailer's share price during his nine-month tenure as chief executive. But a payout of about $1.5 million in cash and stock could help ease the pain. That kind of money grates on people unaccustomed to the golden handshakes, golden handcuffs, golden parachutes and multimillion-dollar compensation packages that are commonplace in executive suites.

More than two months after he resigned, Baltimore County government's former top lawyer continues to be paid his $150,000-a-year salary - and he is to receive another $80,000 when he leaves the payroll next month. Former County Attorney Jay L. Liner has been kept on the county payroll as a consultant to the government on several lawsuits, a spokesman for County Executive James T. Smith Jr. said. Liner, who resigned Nov. 4, will stop receiving county paychecks Feb. 10, when he will receive a severance package and his work with the county will end. As a consultant, Liner has met with county officials a "couple" of times but mostly communicates with them by phone, Smith spokesman Donald I. Mohler said.

A day after Fannie Mae reported the lucrative pay and benefits it plans to bestow on its departing senior executives, critics assailed the company for providing such a soft landing to officials accused of profiting from flawed accounting. Franklin D. Raines, forced out last week as Fannie Mae's chairman and chief executive after five years, is to receive more than $19 million in cash and stock plus a lifetime monthly pension of about $114,000, according to an agreement with the mortgage lending giant.

The Howard County Board of Education has until midnight tonight to approve the severance package requested by fired Chief Business Officer Bruce M. Venter, or its members will be sued in Circuit Court for the third time in as many years, Venter's attorney says. The school system denied a request for one year's salary, $131,325, and an amended proposition was ignored. A counterproposal by schools Superintendent John R. O'Rourke, who fired Venter on Sept. 5 without notice, was dismissed by Venter's attorney, Allen Dyer, as "unacceptable."

North American Vaccine Inc. says a lawsuit filed by its ousted president, Sharon Mates, is nothing more than "a shakedown" for more money, and the company has asked a federal judge to dismiss the suit, federal court records show."

Sears, Roebuck & Co., fighting to stay competitive in an increasingly cutthroat market, told many of its sales people yesterday they would have to take severe cuts in pay and commissions to stay with the company.The Chicago-based company, whose merchandising group has slipped from first to third among the nation's retailers in recent years, also said it would close 10 regional offices, including one in Bethesda. That move, plus a reduction in district offices from 72 to 46, will cut about 600 jobs, 25 to 30 of them in Bethesda.

On the eve of announcing that a New York police commander will be the city's next top police officer, Baltimore Mayor Martin O'Malley said last night that he regretted what he characterized as a "sweetheart" severance package given to former Police Commissioner Edward T. Norris. Kevin P. Clark is expected to be introduced as the new commissioner today, sources close to the mayor said. O'Malley's comments regarding Norris were further evidence of increasing strains in the once warm relationship between the mayor and his former commissioner, whose three-year tenure in the job ended last month when he joined the Maryland State Police as superintendent.

Attempting to quell a furious reaction from employees outraged that he stood to profit from a merger with Dynegy Inc., Kenneth L. Lay, the chairman and chief executive of Enron Corp., decided late yesterday to give up a severance package worth more than $60 million. The tumult at Enron's headquarters in Houston began after the company disclosed in a securities filing early in the day that Lay was in line to collect $60.6 million in pay after the deal closed next year - $20.2 million for every full calendar year left in his employment contract, which expires in 2005.