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Chubb shareholders shoot down $80 million parachute for CEO

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Chubb Corp. shareholders rejected a “golden parachute” package worth more than $80 million for Chairman, President and CEO John Finnegan in a non-binding vote Thursday.

Nearly 61% of the Chubb shares were voted against the golden parachute provision, which also provided benefits to four other senior Chubb executives.

Mr. Finnegan would be eligible for the package if he were terminated or resigned because of a demotion after the proposed acquisition of Chubb by Ace Ltd. He is currently slated to become executive vice chairman for external affairs of North America.

The vote came as both Chubb and Ace shareholders overwhelmingly approved the proposed transaction. Roughly 98% of the shares in both companies were voted in favor of the transaction in separate meetings. Ace shareholders also voted in favor of naming the new company Chubb Ltd.

The golden parachute for Mr. Finnegan included about $23.5 million in cash, $33.4 million in equity and $170,683 in benefits, which consists of outplacement benefits, three years of life insurance and three years of health benefits. It also includes about $23.3 million in tax reimbursement. The tax reimbursement would cover taxes Mr. Finnegan would have to pay if his other benefits were subject to the “golden parachute” excise tax.

None of the other Chubb executives would receive the tax reimbursement.

Chubb had no comment on the compensation vote.