proxy/bc/12"/mike1st/mark2nd

BENJAMIN MARK COLE

Senior Reporter

However the battle for control over Chatsworth-based thrift Great Western Financial Corp. turns out, Chairman James Montgomery and Chief Executive John Maher will be handsomely compensated.

Based on stock options granted as of the most-recent proxy filing, Montgomery should walk away with at least $26.4 million, and Maher with $15.5 million, if they sold their stock in the wake of a buyout at market prices that prevailed last week.

While Maher and Montgomery had their salaries frozen in 1989, they have been "incentivized" with copious stock options the right to buy stock at a set price.

(Montgomery's salary has been $950,000 a year, and Maher's was $650,000 until last year, when it was raised to $780,000 to reflect his promotion from president and chief operating officer to chief executive.)

In addition, both Montgomery and Maher could draw a one-time payment of up to three times their annual salaries, in the event of a change of control at Great Western, according to the thrift's proxy materials.

Following public ire in the 1980s, Congress passed legislation limiting post-takeover golden parachutes to executives of public companies. Generally speaking, departing executives are restricted to receiving bonuses or payments to three times their annual base pay, or they face special excise taxes. Additionally, companies lose tax deductibility on parachutes exceeding three times annual base pay.

Both Montgomery and Maher have received additional stock options since the last proxy was filed, although Great Western spokesmen would not confirm option prices, or the amount of stock sold by the executives in the last year.

But according to Great Western disclosures, Maher has options on 115,720 more shares as of Feb. 25 than he did about a year earlier.

Montgomery has been a heavy seller of stock, selling off about 288,000 shares since the last proxy filing, according to disclosure statements.

On a related compensation matter, Great Western last week adopted an employee severance package that could raise the cost of a takeover by Ahmanson. The takeover-defense package provides at least four months' pay and up to 16 months' pay to any Great Western employee laid off after a takeover of the company.

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