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South Financial Group’s Mack Whittle offers to renegotiate his retirement deal

By Gary Jacobson

November 24, 2008 at 6:06am

The curious timing of Mack Whittle’s retirement as CEO of The South Financial Group continues to test the boundary of what constitutes a golden parachute at a bank receiving emergency aid from the federal Troubled Assets Relief Program.

In early September, well before Congress passed the bailout, Whittle said he would retire from the bank he founded, South Carolina’s largest, before the end of the year. His actual retirement came in late October, just days after his bank applied for TARP funds.

The legislation limits executive compensation and prohibits “any golden parachute payment.”

The size of Whittle’s package is as least $12 million, according to TheStreet.com, which first reported the controversy. Others place the value higher.

Late last week, TheStreet.com said the Treasury Department was reviewing Whittle’s deal and quoted a letter from the former CEO defending his arrangement and saying he’d be willing to renegotiate to “mutually agree to something that allows the TARP investment to be made.”

The South Financial Group says it has received preliminary approval for a $347 million investment from the government.

John C.B. Smith Jr., the bank’s chairman, has defended Whittle, who remains on the company’s board of directors. But South Carolina Governor Mark Sanford and Rep. Bob Inglis, both Republicans, have been critical.

The most prominent member of the bank’s board is probably Darla Moore. The Moore School of Business at the University of South Carolina is named after her.

Moore, who is married to investor Richard Rainwater, sits on the bank’s compensation committee.

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