Considering the $94 a share purchase price was higher than Ralcorp has ever traded at, it is hard to fathom why senior management failed to endorse ConAgra’s offer, especially given the personal payday that awaited each of them under “change-in-control” clauses contained in their respective employee agreements. In a buyout, co-chief executives Kevin Hunt and David Skarie each stood to pocket, at a minimum, $15 million (including $3.7 million in accrued salaries and cash bonuses, and in excess of $6 million in stock awards). Chief financial officer Thomas Granneman left more than $5 million on the table, too (including $3 million in three-years worth of salary and average annual cash bonuses, and more than $2 million in stock awards). Furthermore, actual payouts to named executives would have been significantly higher, as these severance packages were based on the closing price of Ralcorp on September 30, 2010 ($58.48 a share), according to the 2011 proxy statement.
Read more at 24/7 Wall Street: Poor Judgement By Ralcorp's Board
Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.