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Tuesday, November 12, 1996
'Gold' ahead for top RF&P brass?
BY JEFF E. SCHAPIRO
Times-Dispatch Staff Writer
There could be golden parachutes at the end of the line for top brass at state-owned RF&P Corp.
Directors of the railroad-turned-real estate firm today are expected to discuss additional cash awards for senior executives who could lose their jobs after the Virginia Retirement System completes the $570 million sale of RF&P to a New York investment bank in 19 days.
These awards apparently would come atop severance pay, which is roughly a year's salary, as well as bonuses. Excluding the awards and severance, the compensation of the highest paid RF&P officials is already well into six figures.
John B. McKenney III, chairman of the compensation committee of the RF&P board of directors, yesterday declined to comment on the meeting of his panel or its likely topic. Committee recommendations would have to be endorsed by the full board, which also meets today.
VRS investment director Erwin H. Will Jr. said he understood the awards would be discussed at the committee and board sessions, which he plans to attend. Will said he opposes such payments, which could come out of proceeds from the sale of the RF&P to Lazard Freres & Co.
Will said he had heard the RF&P board was considering rewarding management for keeping the company on track through legal and political turmoil caused by the VRS takeover of the RF&P six years ago.
"I guess it's that these people stuck it out," he said.
The payments, while common in the private sector, could prove to be embarrassing for the VRS, coming in the countdown to the Dec. 1 closing with a Lazard-run real estate investment fund.
The amounts of the awards and the number of executives involved could not be determined last night.
A former Virginia legislator - and outspoken critic of VRS ownership of RF&P - questioned the possible payments.
"VRS is a public trust, and because some of the trustees are members of the board, that means they still have a fiduciary responsibility," said former Senate Finance Committee Chairman Hunter B. Andrews, D-Hampton. Two VRS trustees sit on the RF&P board - Charles B. Walker and Clifford A. Cutchins III. Walker is chairman of the board.
For $550 million in cash and $19 million in securities, Lazard will acquire office buildings, warehouses and undeveloped land from Washington to Richmond, including the giant Crystal City office-residential complex and Potomac Yard, once envisioned as the site of a Washington Redskins stadium.
The VRS, with $22 billion in assets, and more than 70,000 beneficiaries, laid out $548 million for the RF&P.