Ex-Marsh President Egan sues broker over severancePosted On: Jul. 16, 2007 12:00 AM CST
NEW YORK--Roger Egan, former president and chief operating officer of Marsh Inc. and now head of Integro Ltd., is suing his old company, charging that Marsh & McLennan Cos. Inc. owes him a severance package in connection with his 2004 departure from the brokerage amid an investigation of its practices.
In a suit filed last week in New York State Supreme Court, Mr. Egan, who is chief executive officer of New York-based Integro, says MMC used the 2004 bid-rigging investigation as an excuse to terminate him and thereafter refused to make various dividends, stock awards and pension payments that Mr. Egan was entitled to upon his termination.
In October 2004, Eliot Spitzer, then-New York Attorney General, sued Marsh, charging that it rigged bids and steered business to favored insurers to the detriment of clients. MMC paid $850 million in 2005 to settle the suit.
In November 2004, Mr. Egan was asked to step down from his position at Marsh due to his accountability as a senior officer of the business units Mr. Spitzer was investigating, not based on "any suggestion of culpability," according to an MMC statement the company issued at the time. Mr. Egan, who had worked for the broker for 32 years, would be helping with transition, MMC said in its statement.
According to the complaint, in a private meeting shortly after that, MMC President and Chief Executive Officer Michael Cherkasky told Mr. Egan that MMC would come up with a "generous settlement" for him and said that he should retain an attorney to facilitate the negotiation.
Shortly thereafter, Mr. Egan, through his attorney, presented Mr. Cherkasky with a proposed separation agreement, which contained provisions for, among other things, a cash severance package, treatment of equity awards and pension plan benefits, court papers say.
In early December, MMC then asked Mr. Egan to vacate MMC's premises. He was given approximately six hours to pack his belongings, after which he was denied access to MMC's offices and to his MMC e-mail and personal files, his suit claims.
Despite statements that MMC would negotiate a separation agreement, Mr. Cherkasky informed Mr. Egan in February 2005 that MMC could no longer talk to him about the agreement, the complaint says.
In April 2005, Mr. Egan submitted his resignation letter to Mr. Cherkasky and shortly thereafter launched brokerage Integro with Robert Clements and Peter Garvey, both former Marsh executives.
According to the complaint, MMC has provided other of its former executives who were "similarly situated" to Mr. Egan at MMC and who left MMC at or about the same time, with "generous settlement packages."
Mr. Egan alleges he is entitled to his own settlement package and is seeking unspecified damages.
An MMC spokesman declined to comment, citing corporate policy not to discuss litigation matters.