The top executive of Rockwell Collins Inc. will receive a change-in-control package worth $30 million if shareholders approve a $30 billion offer for Rockwell from United Technologies Corp.
Shareholders from both companies will vote Jan. 11 on the megadeal, which includes United absorbing $7 billion in Rockwell debt.
Rockwell acquired a workforce of about 1,600 in Winston-Salem when it spent $8.6 billion to buy B/E Aerospace Inc. in April.
The special proxy filing by Rockwell on Monday disclosed the packages for Kelly Ortberg, Rockwell’s top executive, and four other executives as part of the change-in-control clause in their employment contract. The packages are called “golden parachutes,” but the executives would get the money whether they stay with the company or leave.
In addition to voting on the sale, Rockwell shareholders are being asked to approve, on an advisory and non-binding vote, the compensation packages at the special meeting. even if a majority of shares cast Jan. 11 are voted against the golden parachutes, they still would be payable if the United purchase is approved.
Ortberg stands to gain $8.18 million in cash that includes a $270,444 bonus. He also qualified for an equity stake worth $21.1 million, an executive pension payment worth $612,000, and perks worth $98,501 that includes $25,000 for outplacement assistance.
The golden parachute does not include “any amount that would be payable upon any termination of services that is not connected with the merger.”
The golden parachute is payable if Ortberg or another named Rockwell executive is terminated immediately after the deal is completed under certain qualifying circumstances.
For fiscal 2016, Ortberg made $997,348 in salary, $1.11 million in incentive pay, stock and option awards valued at $5.02 million on the date they were awarded, and $212,715 in all other compensation. Total compensation was $7.59 million.
The plans are to close on the transaction in the third quarter, possibly in early July. Rockwell has agreed to pay United a $695 million breakup fee if Rockwell is not able to complete its end of the transaction.
The companies have said that Rockwell and UTC’s Aerospace Systems division would be integrated to create Collins Aerospace Systems. Ortberg would serve as Collins Aerospace’s chief executive.
Rockwell’s other four named executives also would receive lucrative golden parachutes.
Patrick Allen, chief financial officer, would receive $8.88 million. By comparison, his fiscal 2016 compensation was $2.4 million.
Kent Statler, chief operating officer for commercial systems, would qualify for $8.22 million. His fiscal 2016 compensation was $2.57 million.
Philip Jasper, chief operating officer for government systems, would qualify for $6.06 million. His fiscal 2016 compensation was $2.09 million.
Robert Perna, general counsel and secretary, would qualify for $4.65 million. His fiscal 2016 compensation was $1.37 million.
The companies said Dec. 5 that United may take until March 31 to determine where to place the headquarters for the Collins Aerospace Systems unit.
About 200,000 people work for United, which has its headquarters in Farmington, Conn. More than 40,000 work for the UTC Aerospace Systems division based in Charlotte.
Rockwell, based in Cedar Rapids, Iowa, has 30,000 employees.
Ortberg has pitched a bigger-is-better message to local employees as they braced for more uncertainty.
“There will be no local impact on staffing levels,” Ortberg told the Journal on Sept. 5. “The combined company will be larger and more stable and give employees more opportunity to grow the overall business and leverage our research and development capabilities.”
However, on Oct. 20, Josh Baynes, senior media relations manager for Rockwell, confirmed that company officials have “begun discussions with its union employees and their leadership” at its Winston-Salem facility.
Employees have told the Winston-Salem Journal that at least 130 local Rockwell workers could be affected by a potential transfer of aftermarket production, possibly to facilities in the Philippines.
The Journal is not identifying the employees because they fear losing their jobs and possible severance packages.
At 130 jobs, it would represent 8 percent of Rockwell’s local workforce.
Employees said the bulk of affected workers are based at Rockwell’s operations near Smith Reynolds Airport in the plastics molding and shaping departments for aircraft seating.
Baynes said employee conversations involve Teamsters 391, based in Greensboro.
“As far as what exact positions, that’s still be evaluated,” Baynes said. “We are still in the decision-making process, and negotiations with our union are a key part of that process.”
In July, Rockwell announced plans to transfer an undetermined number of production line jobs from a plant in Everett, Wash., to the Philippines and to a facility in Kansas, according to the Puget Sound Business Journal. The Philippines facility would gain two lines and the Kansas facility one.
Baynes has said “any potential changes in Winston-Salem are unrelated to product-line moves this year in Everett and the pending acquisition of Rockwell Collins by UTC.”