Mellon Financial paid $20 million to buy out the contract of former CEO Martin McGuinn, according to the firm's most recent proxy statement filed today with the SEC. According to Richard Bove, an analyst at Punk, Ziegel & Co., the buyout will cut Mellon's share price by 3 cents per share.
Ken Herz, a Mellon spokesman, said in an interview: "This is simply an accelerated payment. This is all money that Mr. McGuinn already earned. He's not getting anything that is not in his contract. This is a long-standing contract that was signed years ago."
Mr. McGuinn, who joined the firm in 1981, took over as chairman in 1999 and stepped down on Feb. 13.