In line with a regulatory filing, five of eBay Inc. 's ( EBAY ) top executives will step down following the spinoff of its payment-processing unit PayPal next year. The departure of the employees will cost the company more than $35 million.
Golden Parachute implies a hefty payment or financial recompense guaranteed to an employee if dismissed following a structural change in the company.
eBay CEO John Donahoe, who will hand in his papers post the spinoff, will receive around $23 million, as per Forbes estimates.
Donahoe, who has been working with eBay for more than six years, will be given a severance package comprising cash payment equivalent to two times his yearly base salary and the acceleration of all restricted stock units (RSUs) and stock options.
Also, CFO Bob Swan will be compensated in a similar fashion on his departure. His exit package is estimated to be around $12 million.
The golden parachutes, however, will depend on eBay's performance and stock price at the time of the split.
Senior Vice President and General Counsel Michael Jacobson; Senior Vice President of Global Human Resources Beth Axelrod; and Senior Vice President of Corporate Communications Alan Marks are also entitled to such compensations. Their bonuses will be equal to 1.5 times their annual pay and bonus.
Post PayPal spin-off, eBay will have Devin Weing as its CEO. Weing is currently the president of eBay Marketplaces.
Meanwhile, Dan Schulman, will become the CEO of the new PayPal payments company.
eBay currently carries a Zacks Rank# 3 (Hold). Better-ranked stocks in this industry include Geeknet, Inc. ( GKNT ), Mercadolibre, Inc. ( MELI ) and Overstock.com Solutions, Inc. ( OSTK ). All of them carry a Zacks Rank #2 (Buy).