John Hancock Financial Services Inc. chief executive David D'Alessandro said yesterday he will receive $22 million in Manulife Financial Corp. shares as a result of yesterday's deal, as his restricted Hancock stock will convert to the acquirer's shares when the deal closes.
The top 10 executives at Hancock will receive a combined $60 million in Manulife shares because of the deal.
D'Alessandro said he would sell some Manulife shares immediately to pay taxes, and pledged yesterday that he would hold on to at least half of the remaining shares. D'Alessandro said he, chief financial officer Thomas Moloney, general counsel Wayne Budd, and senior executive vice president Michael Bell signed agreements to stay with the new, combined company for at least one year after the deal closes.
D'Alessandro also said that Bell had voluntarily agreed to waive his contractually guaranteed right to receive a pension payment of $33,333 a month for the rest of his life if he loses his job "for any reason" in a change of control. The clause in his employment contract was the subject of negative publicity in recent months as Hancock's executive compensation came in for increased scrutiny.
D'Alessandro himself has taken the most heat from some shareholders and Wall Street analysts over compensation he received in 2002, which totaled $21.7 million in cash, restricted stock grants, payouts from the company's since-abandoned long-term stock incentive plan, and company-paid premiums for his split-dollar life insurance contract. He argues that the number skews reality because much of it is for work he actually performed in 2001, when the company's shareholders fared better than in 2002.
The shares D'Alessandro will receive when the deal closes represent the value of the restricted shares he was awarded in 2002 and earlier years. Had Hancock remained independent, D'Alessandro and other executives would have had to wait at least five years to take full control of the shares.
Boston lawyer Jason Adkins, a frequent Hancock critic, has told the Globe that the change-of-control payouts "might lead some to conclude that the managers making this decision to sell the company are operating for their own interests rather than that of the state, the policyholders, or the shareholders."
Adkins filed a lawsuit May 28 accusing Hancock's senior executives of undermining the company's financial health by paying themselves too much at a time when revenues and profits were falling. Hancock has called that charge "nonsense" and pledged to fight the lawsuit in court.
Yesterday, D'Alessandro said any new stock or options he receives from Manulife will be based on a five-year vesting program. If he leaves the company before then, he will not receive the full value of the shares. He also said the $37.60 per share acquisition price to be paid by Manulife represents a 121 percent increase for shareholders over the $17 per-share price of the company's initial offering on Jan. 27, 2000.
Scott Bernard Nelson can be reached at firstname.lastname@example.org. Steve Bailey of the Globe staff contributed to this report.