Anadarko Changed CEO's Potential Payout Before Chevron Deal

(Bloomberg) -- Anadarko Petroleum Corp. tweaked terms determining severance payments for senior executives the day before Chevron Corp.’s $33 billion buyout offer was announced, setting up Chief Executive Officer Al Walker to collect millions of dollars of additional compensation if he leaves the company.

The board also eliminated a provision that would have reduced Walker’s potential payout because he hasn’t yet reached age 65, according to an April 17 regulatory filing. The tweaks, approved on April 11, also included a vow to cover excise taxes on golden parachute payments to Anadarko’s top bosses -- a type of benefit that many shareholders have criticized for years.

In addition to Walker, 62, President Robert Gwin, Chief Financial Officer Ben Fink and three executive vice presidents will receive 200 percent of their target bonuses for 2019 just before the deal is completed, according to the filing, which was reported earlier by the Wall Street Journal. An Anadarko spokesman didn’t immediately respond to a request for comment.

The changes to Walker’s severance terms could boost his exit package by at least $2.5 million to $66.8 million, according to data compiled by Bloomberg. That also includes equity awards worth about $34 million and $21.4 million in accumulated pension payments.

Anadarko is currently trading above Chevron’s offer price, indicating some investors think there could be a higher bid. Occidental Petroleum Corp. made a $70-per-share offer for Anadarko before it agreed to Chevron’s proposal, a person familiar with the matter said earlier this month.

To contact the reporters on this story: Anders Melin in New York at amelin3@bloomberg.net;Rachel Adams-Heard in Houston at radamsheard@bloomberg.net

To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net, ;Pierre Paulden at ppaulden@bloomberg.net, Joe Carroll

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