Joseph Bachelder III, Engineer of the Golden Parachute, Dies at 88

Joseph E. Bachelder III, a lawyer and compensation negotiator who standardized the so-called golden parachute, which guarantees that top executives of a company are generously rewarded if they are forced out in a takeover, died on Dec. 13 at his home in Princeton, N.J. He was 88.

The cause was cancer, said his brother, Stephan G. Bachelder, who worked with Joseph at his law firm.

A golden parachute is a clause in an executive’s employment contract that ensures a gilded landing in the event that he or she is ousted in a merger or an acquisition. Charles Tillinghast Jr., the former Trans World Airlines chief executive, is credited with being the first person to have had such a clause written into his contract, in 1961. But it wasn’t until the 1980s that the provisions proliferated, in part because of Mr. Bachelder’s novel approach to executive contract negotiations.

Mr. Bachelder (pronounced BAH-shul-der) used computerized statistical analyses of industries to demonstrate why his clients were worth a lot more money than anyone else, justifying his demands with data demonstrating the risks his clients had taken by accepting a leadership position.

“He believed that to large companies, there is no better indicator of success than the quality of its C.E.O., and that outstanding C.E.O.s are extremely rare birds,” Stephan Bachelder said in a phone interview. “Often he was representing C.E.O.s leaving happy homes to take on a huge challenge, and they wanted to be protected.”

In a precarious market, golden parachutes protected against a potentially precipitous drop from the heights of leadership. Mr. Bachelder made such executive compensation negotiations his specialty, showing up at such talks with quantitative analysts and finance experts, who could help translate the complex computer data into top pay.

Among his clients were Louis V. Gerstner Jr. at RJR Nabisco and I.B.M.; Lawrence A. Bossidy, the former chairman at AlliedSignal; George M.C. Fisher, former chairman of Eastman Kodak; and Jamie Dimon when he was chief executive of Bank One.

These generous exit packages have been controversial, particularly when they’ve been paid out during a scandal. For instance, Roger Ailes, the chairman and chief executive of Fox News, walked away with $40 million in 2016, less than a year before his death at 77, despite being trailed by accusations of sexual harassment.

Indeed, Mr. Bachelder’s success — securing such extraordinary perks for clients as a post-retirement private jet and access to country clubs — prompted a New York Times interviewer to ask him in 2000 if he was doing his job too well.

In 2003, Mr. Bachelder testified before a Senate committee on the topic of excessive C.E.O. pay, which Senator John McCain said at the time was “making a lot of Americans angry.” Mr. Bachelder said he did not believe that executive pay had “grown outrageously” and argued that generous compensation was justified by the outsize importance of a chief executive to a company’s success.

Latest Updates

Mr. Bachelder closed his firm in 2012 and, at 79, joined the national law firm McCarter & English at its Manhattan office as a special counsel. He continued to represent clients, lecture at Harvard and contribute a monthly column to The New York Law Journal. Most recently he wrote about the impact of Covid-19 on executive pay.

For his part, Mr. Bachelder, perhaps not surprisingly, was able to command impressive compensation for himself. Joseph Boccassini, a managing partner at McCarter & English, said in an interview that Mr. Bachelder had billed at a rate of $1,115 an hour.

Joseph Elmer Bachelder III was born on Nov. 13, 1932, in Fulton, Mo., about 100 miles west of St. Louis. The family moved frequently.

His mother, Frances Gray Bachelder, was a homemaker and painter. His father, Joseph E. Bachelder Jr., was a professor and pollster who was credited as being the only in his field to have predicted Harry S. Truman’s 1948 presidential win.

His father’s statistical mind was believed to have influenced Mr. Bachelder’s way of thinking, his sister, Jane Johnson, said in a phone interview. He had “a computer chip for a brain,” she said.

Joseph graduated from Exeter Academy in New Hampshire in 1950, then graduated magna cum laude from Yale University in 1955, the same year he married Louise Mason. He graduated from Harvard Law School in 1958 and practiced tax law before alighting on executive compensation as his niche. He settled in Princeton early in his career and lived there most of his life.

In addition to his brother and sister, he is survived by his wife; three daughters, Louise Bachelder Alcock, Christina Bachelder Dufresne and Hilary Houston Bachelder; and four grandchildren.

Mr. Bachelder excelled at tennis, Ms. Johnson said. She recalled how both she and her brother had, in their youth, given private lessons on the courts at Princeton University, where their father taught at the time.

“I can’t remember how much we got paid,” she said. “It could have been between 50 cents and $3.”

Source: Read Full Article