Officially, Prince (57) is retiring as chief executive of Citigroup after it got shellacked in the subprime mortgage market.
To my way of thinking, his resignation might better be characterised as retirement with a foot in the back.
The king, of course, was predecessor Sandy Weill. He performed heroically as chief executive and his pay would have made Croesus blush.
His successor didn't perform well at all. And if there is good news here, it's that he's not going out the door with very much either.
First, his performance, resembles the downhill slope of a slalom run. Prince became chief executive on October 1 2003. Between that date and the close on November 5 this year, Citigroup's total return was negative 2.5 percent a year. That compares with a return on the Standard & Poor's 500 (S&P 500) index of 12 percent a year.
And that's the good news.
For the three-, two- and one-year time windows to November 5 this year, annual total return was, respectively, negative 4.1 percent, negative 7.4 percent and negative 24 percent. The corresponding figures for the S&P 500 were gains of 11 percent, 13 percent and 12 percent.
As to his exit pay, Prince will receive no cash severance. He is already vested in a pension plan, the present value of which was a comparatively small $1.7 million (R11 million) last December.
Underwater options
As for Prince's previous option awards, the vesting restrictions will be removed, but he will have only two years to exercise the options. Because of the stock's terrible performance, only one such option is in the money - and then only to the tune of $866 000.
However, if his successor manages to produce an expected market rate of return of about 11 percent a year over the next two years, Prince's options could go into the money by roughly $2.8 million.
He also becomes vested in his stock awards. On November 5, these had a value of $22.9 million.
They will not be disbursed immediately, but only when they normally would have been paid out. Those payout dates extend to December 2010.
Prince's take is paltry compared with that of his erstwhile colleague, Stan O'Neal, the former chief executive of Merrill Lynch. O'Neal also had no cash severance when he was ousted last month.
But the value of what he received by way of vested stock and option awards weighed in at close to $160 million.
Coming and going
One of the reasons O'Neal did so much better was that he was paid so much more during his career. Last year, for instance, he received total pay of $48.5 million.
That figure - when tested against 542 other chief executives running companies with market capitalisations of $3 billion or more, and after controlling for differences in company size, one-year total return and pay risk - turned out to be 178 percent over a competitive level of pay.
Against that same group of chief executives, Prince, who received $24.8 million last year, was paid only 15 percent above a competitive rate.
For all the greed on Wall Street, severance pay practices are quite lean. I checked into possible severance pay for these chief executives: James Cayne of Bear Stearns, Richard Fuld of Lehman Brothers, Lloyd Blankfein of Goldman Sachs Group and John Mack of Morgan Stanley.
Although all these companies would probably provide early vesting on stock and option awards in the event of a retirement or a discharge for other than cause, none will provide any cash severance pay.
Being like Mike
Put it this way: Michael Ovitz should thank his lucky stars that he went to Walt Disney and not to one of the major Wall Street firms. For 15 months of work, he carted away more than $100 million.
Bottom line: Prince performed badly, and by the standards of Wall Street, he wasn't paid much either. So there's some justice there.
Still, maybe someone ought to stage a benefit for him. I can think of the perfect venue: The Joan and Sanford I Weill Recital Hall, which is part of Carnegie Hall.