TRW Pulls Plug on Victor Rice's $27 million Golden Parachute

Strategic Insights -

Victor Rice, the departing chief executive of LucasVarity, is set to leave with a $27 million payout after refusing a reduced role with the company's new owner, TRW. The American engineering group is acquiring LucasVarity for $4 billion, with the deal expected to be finalized next month. Rice had initially been offered the position of TRW vice-chairman, but this was subsequently withdrawn, and he was instead offered a directorship, albeit with limited responsibilities. The impasse led to Rice's decision to decline the offer, paving the way for his lucrative exit package.

Key Takeaways:

  • Victor Rice, CEO of LucasVarity, will receive a $27 million payout, composed of $4 million to $5 million in direct compensation and the remaining amount from share options accumulated since the mid-1980s.
  • Rice had been offered the position of TRW vice-chairman, but this offer was withdrawn, and he was then offered a directorship with limited responsibilities.
  • Talks between Rice and TRW had been dragging on, with Rice ultimately deciding not to join the company in any capacity.
  • Tony Gilroy, Rice's right-hand man at LucasVarity, is also a target for TRW, with the company aiming to bring on board the majority of senior staff from LucasVarity.
  • TRW is close to finalizing agreements with senior LucasVarity staff and expects to have the majority of them on board.

Statistics:

  • $27 million: the estimated value of Victor Rice's exit package.
  • $4 billion: the purchase price of LucasVarity by TRW.
  • $4 million to $5 million: the estimated direct compensation component of Rice's payout.
  • Mid-1980s: the time period during which Rice accumulated his share options.
  • 58: Victor Rice's age.

Sources:

  • The Times (1999) (exact date not specified)