Breathtaking as that number is, Dunlap’s colleagues, Wall Streeters and even activists who normally squawk about overpaid CEOs actually think he’s worth it. Nell Minnow, a ferocious critic of lavish corporate compensation who runs Washington’s Lens Inc. investment group, sums up the Zeitgeist: “He deserves all the money he gets.”
Here’s why. When Dunlap took Scott’s helm in 1994, the company stock price had been mired in the teens throughout the 1990s and its debt was in the billions. Dunlap, already credited with turnarounds at companies like Diamond International, a wood-pulp firm, sold off $2.4 billion worth of businesses and cut 11,000 jobs. It wasn’t all slash and burn, though. He also introduced dozens of new products-from toilet paper with baking soda to hypoallergenic face wipes. He gussied up older products, too. For example: he dumped the 1950s Nymph on the packages of Cottonelle toilet paper and replaced her with bold ’90s-style graphics. Wall Street’s response was electric: over his 15-month tenure, Scott’s stock rose by 150 percent. As Dunlap says with characteristic humility, “it was the greatest restructuring ever.”
Maybe so, but his buyout package is certainly one of the sweetest ever. He’ll receive roughly $60 million in stock options and $12 million in salary right away, instead of over the next four years. Moreover, because Kimberly-Clark couldn’t persuade Dunlap to stay on as number two–for him it is top dog or nothing-it agreed to pay him $20 million not to work for a rival. Of course, not everyone is pleased about Dunlap’s windfall. Alyssa Machold of the Council of Institutional Investors says that $100 million is too much for his by-the-book downsizing. She complains that the merger gives Dunlap an easy exit before the effects of his reforms are fully known. After putting the company through boot camp, the general is leaving," she says. “What about the rest of the war?”
Dunlap argues that most of his compensation will be in some form of Kimberly-Clark stock, which gives him a personal stake in the company’s performance. Most investors don’t seem to need such reassurance. Says Lens’s Minnow, “Wherever he goes, I’m going along, too.” Already the “Rainbo in Pinstripes,” as Dunlap calls himself, is looking for a new opportunity to take charge. He suggests that Kmart and Westinghouse, two of the more sclerotic companies around, might benefit from his services. His reward this time? Well, as the man says, you can’t pay him enough.
