Office Depot and OfficeMax completed a $1.2 billion merger in November 2013. Roland Smith, the new CEO, has been putting together his executive team by retaining people from both companies and looking outside of the Office Depot – OfficeMax family.
According to a filing with the U.S. Securities and Exchange Commission, Office Depot paid six-figure bonuses to retain top executives before and after its merger with OfficeMax.
Elisa Garcia, General Counsel and executive committee member at Office Depot received a $1.5 million bonus over three years. The bonus is in addition to her compensation of $2.6 million. Michael Allison, former Executive Vice President for Human Resources at Office Depot, and current “Chief People Officer" received a retention bonus of $500.000.
Deborah O’Connor, former Co-Chief Financial Officer at OfficeMax and current Senior Vice president of Integration for Office Depot received a $162,500 retention bonus and is eligible to receive an additional $150,000 bonus if she remains actively employed with Office Depot until June 30, 2014.
Karen Denning, spokesperson for Office Depot, said “Retention awards to company executives are an accepted practice in such situations to ensure business continuity.” Companies going through mergers often pay retention bonuses to ensure key management personnel stay in place for smooth transition.
Office Depot choose Boca Raton as its headquarters after the merger and has advised the state of Illinois it will close the OfficeMax headquarters, located just outside of Chicago, by early 2015 and layoff approximately 1,600 employees.
Severance packages for departing executives were also paid. Robert Moore, former Executive Vice President for Marketing and Merchandising at Office Depot received $2.7 million in severance pay in January 2014.
Neil Austrian, former CEO of Office Depot who left the company in December 2013, will receive a severance payment of $7.9 million on May 2014. Savi Saligram, former CEO of OfficeMax who left the company in September 2013, received a severance payment of 3.68 million. Michael Newman, former CFO of Office Depot received severance pay of $2.8 million.
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