EBay Reveals $23 Million Golden Parachute For CEO John Donahoe In PayPal Split

EBay CEO John Donahoe will be out of a job when his company splits off PayPal from its marketplace business in 2015, but he's about to be handsomely rewarded for his departure. According to a financial document filed with the Securities and Exchange Commission on Thursday, Donahoe, who has been at the eBay helm for more than six years, will receive a severance package that includes a cash payment equal to two times annual base salary and the acceleration of all restricted stock units (RSUs) and stock options.

In all, the CEO's golden parachute, depending on eBay's performance and stock price at the time of the split, could be valued at around $23 million, based on FORBES estimates. Other executives who will be compensated in similar fashion for their departures include CFO Bob Swan, whose exit package is estimated to be around $12 million;  Senior Vice President and General Counsel Michael Jacobson; Senior Vice President of Global Human Resources Beth Axelrod; and Senior Vice President of Corporate Communications Alan Marks.

"John’s transition package is closely tied to the performance of the company during the separation period and the company’s stock price at the time of separation," said eBay spokesperson Amanda Miller in a statement. "EBay believes strongly in pay for performance, and the company has achieved the publicly disclosed performance metrics the Board established, including revenue and operating margin metrics."

Donahoe and the other executives' compensation, comes after reports that eBay is considering layoffs that could total at least 3,000 people--or 10% of its workforce--following its split with PayPal in the second half of next year. The payout, however, is typical of most severance packages for senior officials said Aaron Boyd, director of research at Equilar, which tracks executive compensation at public companies.

"I wouldn't say this stands out as unusual, but their scenario assures them a higher percentage payout of what they could get versus companies that have very restrictive payouts if an individual is fired," he said. 

Donahoe, who said he would step down from his role as CEO when eBay announced the PayPal spinoff in September, and Swan will receive a cash payment equal to two times annual base salary and two times the annual cash bonus, as well as the acceleration of all RSU and stock option awards that are unvested at the time of the split. The other executive officers will receive a cash payment equal to 1.5 times annual base salary and 1.5 times the annual cash bonus, and will have the same sped up vesting for unvested equity.

Equilar said that $23 million figure for Donahoe could rise even higher if executives realize future performance-based stock awards that have not yet been disclosed by eBay. Using eBay's closing share price on Thursday of $57.73, Equilar ran its own calculations and said that Donahoe could make up to $46 million, with the inclusion of performance-based equity, while Swan could exit with as much as $22 million.

Donahoe will be replaced by Devin Wenig, who will head up eBay, and Dan Schulman, an American Express executive who will be PayPal's CEO. Miller did not confirm or deny whether Donahoe would be joining PayPal's board following the split, despite reports that he would moving there following the spinoff.

"I’m 200% focused on getting this done and I’ll continue to serve on the boards," Donahoe told FORBES in September, when asked what he'd be doing after the split. "I won’t worry about that until the time comes–I have my hands full until then."

Update on Dec. 18, 2014 at 3:45 p.m.: An earlier version of this story identified eBay's Senior Vice President of Global Human Resources as Kristin Yetto. That was incorrect. Her name is Beth Axelrod.