Aflac chief passes up golden parachute

ATLANTA — Aflac Chairman and CEO Daniel P. Amos announced Friday he is giving up his $13 million "golden parachute" — or severance package he would receive were he to leave to company — in response to the current global economic crisis.

Amos isn't in danger of being fired and with 19 years as chief executive is among the longest-serving CEOs at an American publicly traded firm. He added the chairman's title in 2001.

But the move by the head of the Columbus, Ga.-based supplemental insurer comes six months after Aflac made another headline grabbing move: Becoming the first publicly traded firm to give shareholders an advisory —but non-binding — vote in executive compensation.

And it suggests, said a corporate governance expert, that Aflac is increasingly building a reputation for being at the forefront of making changes that benefit shareholders.

It also could lead other companies to follow suit voluntarily, said Peter Gleason, managing director and chief financial officer of the National Association of Corporate Directors. The Washington-based group is a nonprofit, apolitical organization that studies corporate governance issues.

What's more, Gleason said, such exit payouts will get more attention anyway because the $700 billion Troubled Asset Relief Program enacted in October to help cash-strapped banks places restrictions on golden parachutes for executives at firms seeking funding under that federal bailout plan.

"Overall we're going to see a lot more scrutiny," Gleason said. "You're still going to get parachutes. They're just not going to be as golden."

In an interview, Amos —who received a pay package last year that was roughly $12 million in base pay, bonus, incentives and the estimated value of stock options granted — said his decision came in part because of the say-on-pay issue.

The clause in his employment contract would give him three years' salary and bonuses were he to be booted from his post for any reason.

"I thought that clause in my contract went against that pay-for-performance policy," Amos said. "They don't need to pay me three years' [salary] to tell me I didn't do a good job. It sends a message to the shareholders that I was going to do the right thing."

He added while other companies might take up the issue, Amos doesn't believe golden parachutes will go away completely because newly hired CEOs and other senior executives will want some incentives to take those jobs.

"But at this point in my career at 19 years, I don't need it. Today everyone is so nervous I think the only thing that matters is trust and integrity and that's important to shareholders," Amos said. "The CEO dictates what takes place in the company. That's where the big bucks are paid."

Peralte C. Paul writes for The Atlanta Journal-Constitution.