Bob Devlin, the chairman and chief executive of Prudential bid target American General, is now entitled to an astonishing pay-off, currently worth more than $280m (€317m).
The US life insurer's most recent filings with the US Securities & Exchange Commission disclose that Devlin's package is worth far more than the initial $150m estimate by Financial News, based on previous filings. But the Prudential confirms the American General boss and his team have agreed to defer part of their entitlements for a three-year period. Devlin might still be able to cash in immediately if his firm is taken over by rival bidder American International Group. AIG boss Hank Greenberg has tabled a bid worth $46 a share, but Devlin has yet to recommend it to his shareholders, although it tops the Pru's paper offer, which is worth $44 per American General share.
If the Pru does succeed, the bulk of Devlin's entitlement - his holding of ordinary shares - appears unaffected by the deferral arrangements recently insisted upon by Jonathan Bloomer, Pru chief executive.
After exercising tens of millions of dollar's worth of options, Devlin now owns 4.6 million American General shares - 75% more than his shareholding a year ago. These are currently worth $207m.
On top of that, the 60-year-old American General boss owns options valued at $31m, restricted stock awards worth $22m and long-term incentive plan awards valued at nearly $5m. Devlin, who was paid nearly $5.5m in cash and bonuses alone last year, is also entitled to a three-year pay-off, worth a further $16.5m.
Under the deferral deal, Devlin has agreed to cash in a maximum one-third of the Prudential shares he receives each year in exchange for his 'restricted stock, restricted share units or associated performance awards, which vest immediately prior to the merger' and Prudential options he receives in exchange for his American General options.