While Kraft Foods Inc. and Philip Morris International Inc. play musical chairs with their general counsel, some folks are wondering exactly what went on in a meeting between Philip Morris GC David Bernick and chief executive Louis Camilleri that ended with Bernick’s resignation.
But before we go there, here’s more on those musical chairs. Though PMI remains mum, Kraft has announced that its general counsel, Marc Firestone, will leave in April to replace Bernick. Firestone is returning to his old job; he left as general counsel of PMI in 2003.
Kraft said it will replace Firestone with Gerhard Pleuhs. Pleuhs is currently deputy general counsel, and has been with the Kraft legal team since 1985.
Now back to that Bernick/Camilleri meeting.
PMI, the tobacco giant based in New York City but with operational headquarters in Lausanne, Switzerland, didn’t issue a press release about Bernick’s resignation. Neither Bernick nor the company immediately responded to an email message seeking comment.
But on February 13, the company filed an 8-K report about the resignation with the U.S. Securities and Exchange Commission.
The filing indicates that Bernick met with Camilleri on February 9. On the same day, PMI’s compensation committee awarded Bernick an “annual incentive compensation award” of $4.5 million, while Camilleri received $8.8 million, and chief operating officer Andre Calantzopoulos received $5.7 million.
So was Bernick unhappy?
Camilleri wrote an internal announcement about the meeting, which the company has released. It said, in part:
In the past few weeks, David Bernick, senior vice president and general counsel, and I have had numerous candid discussions regarding his personal aspirations and objectives. . .
As a result of these conversations, I regret to inform you that David has concluded that his ambitions would be best served by pursuing other attractive avenues available to him. Accordingly, late last week, he tendered his resignation which I have accepted. In so doing, he has pledged his full support and availability, if required, to assure a smooth transition through to the end of June 2012.
The company also included Bernick’s separation agreement in its SEC filing. The key terms include an agreement by Bernick not to compete with the company for 12 months, in exchange for a payment at the end of that period of nearly $1.6 million.
Bernick’s previously granted 147,440 shares of deferred stock will vest at an accelerated rate and be awarded upon his exit from the company. On Wednesday, a share of PMI stock was selling at $82, making Bernick’s stock worth about $12 million.
The company also agreed to relocate Bernick and his family from Switzerland to Chicago. Bernick previously worked for 31 years for the law firm Kirkland & Ellis. At Kirkland, Bernick was a senior partner and member of the firm’s management committee for 15 years. He litigated complex cases that ran the gamut from asbestos to tobacco, and defended multinational corporations such as ABB Ltd., Abbott, Baxter International, Apple, Dow Chemical, DuPont, IBM, and W. R. Grace, as well as Philip Morris and other tobacco clients. A call to the law firm’s Chicago office on Wednesday was not immediately returned.
