Lorillard CEO to get $44M after Reynolds merger
RICHMOND, Va. (AP) — The CEO of Newport cigarette maker Lorillard Inc. is set to receive more than $44 million following the planned $25 billion merger with Reynolds American Inc., regulatory filings show.
Murray Kessler is one of several Lorillard executives to receive compensation if they're terminated after the deal closes, according to a filing with the Securities and Exchange Commission.
The bulk of Kessler's $44.7 million compensation package would come in the form of a payout of stock awards worth $32.8 million. He'd also receive $10.6 million in cash, which amounts to three times his base salary and annual bonus, according to the filing late Friday.
Last fiscal year, the 55-year-old Kessler received a pay package valued at $10.3 million, up 21 percent from the year before, according to an Associated Press analysis of a regulatory filing.
Upon completion of the deal, Kessler, who became CEO of Lorillard in September 2010, will get a seat on Reynolds' board of directors, which will come with additional compensation.
Reynolds announced the deal in July to combine two of the nation's oldest and biggest tobacco companies, creating a formidable No. 2 to rival Altria Group Inc., owner of Philip Morris USA.
Together the company would market Camel, Newport, Pall Mall and Natural American Spirit cigarettes, as well as Vuse-brand electronic cigarettes.
The latest filing also outlines details on two years of events leading up to the announced merger, including that Kessler had been considered a possible candidate to head the new company and that Lorillard had rejected an initial offer made by Reynolds in January.
The companies plan to sell the Kool, Salem, Winston, Maverick and blu eCig brands to Imperial Tobacco Group for $7.1 billion to ease regulatory concerns about competition. However, the companies also said in the latest filing that it may need to give Reynolds' Doral brand to Imperial Tobacco — for no additional cost — if mandated by federal regulators or if retail market share of the other brands fall below 4.9 percent.
In late August, the companies said the Federal Trade Commission has asked for additional information as part of an antitrust review of the deal that's expected to close in the first half of next year.
Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum.