Marsh & McLennan Cos. Inc. will pay Michael Cherkasky, the executive they brought in to broker a costly legal settlement in 2005, $7.15 million as part of a severance package reached after he was forced out earlier this year.
MMC, one of the world’s largest insurance brokers, said it would pay ex-CEO Cherkasky a lump sum, and agreed to allow stock and option awards vest immediately, according to a filing with the U.S. Securities and Exchange Commission Friday.
The former prosecutor — who was head of MMC corporate unit Kroll Inc before being tapped for the top spot in 2005 — was brought in after ex-CEO Jeffrey Greenberg was ousted amid allegations the insurance brokerage accepted kickback payments in exchange for placing business with certain insurers.
While Cherkasky was praised for helping to lift MMC out of its legal troubles, he eventually came under investor fire for the company’s poor financial performance.
Brian Duperreault, an industry veteran who had been chief executive of Bermuda-based insurer Ace Ltd, was brought in this month to replace Cherkasky.
Under a separation agreement reached on Feb. 15, Cherkasky will serve as a consultant to MMC through the end of March, assisting with the firm’s transition, and other projects, according to Friday’s filing.
He will be paid a monthly consulting fee of $333,333, MMC said, pro-rated for any salary paid year-to-date.
Cherkasky will not be paid any bonus for 2007, but 293,409 restricted stock units and 128,469 shares of restricted stock will be distributed to him within the next month, MMC said.
He will also receive 820,967 vested stock options exercisable over the next five years, assuming exercise prices are reached.
Other benefits under Cherkasky’s separation package include executive outplacement services, and health insurance coverage through the end of the year.
Cherkasky has agreed to not directly compete with his former employer, nor solicit clients or employees of MMC for the next two years.
(Reporting by Lilla Zuill; Editing by Braden Reddall)
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