Former Equifax CEO walks with at least $48.9 million stake and pension

Former Equifax Chief Executive Richard Smith will walk away from the company with at least $48.9 million in company stock and pension benefits, according to company disclosures.

That has some lawmakers upset, who believe the man who was in charge of the company during one of America’s worst data breaches should give up some compensation through so-called “clawback” provisions.

Some are also expecting Equifax’s new top executives and Smith, who stepped down Tuesday, to appear next week at Senate and House hearings where they’re likely to be grilled on the data breach.

From mid-May to the end of July, criminals got away with Social Security numbers and other key identifying information on 143 million Americans, according to Equifax. The company disclosed the hacking incident on Sept. 7.

“It’s not real accountability if the CEO resigns without giving back a nickel in pay and without publicly answering questions,” said Sen. Elizabeth Warren, D-Mass., in a statement. “Mr. Smith, along with the new Chairman and the new interim CEO, should all testify before the Senate Banking Committee. The American public deserves answers about what went wrong at Equifax and what the company plans to do going forward.”

But it appears unlikely that Smith will be subject to clawback provisions under federal law. According to the 2010 Dodd-Frank law enacted after the 2008 financial crisis, a company’s top executives don’t risk losing their pay to clawbacks unless the company made a “material” misstatement that requires it to re-state past financial results. Equifax probably won’t have to restate its earnings.

The 2002 Sarbanes-Oxley law, which applies to CEOs and chief financial officers, has similar language, although it also allows clawbacks for “misconduct.”

An Equifax spokesman didn’t say whether the company will seek to recover some of Smith’s past pay.

Smith is giving up some pay. According to Smith’s one-page departure agreement included with his announced retirement on Tuesday, Smith forfeited his 2017 bonus. Equifax spokesman Wyatt Jefferies said the bonus could have been comparable to previous years' bonuses of about $3 million.

Jefferies said Smith will not receive a $5.2 severance payment he could have received if the departure was involuntary.

He is, however, eligible for a pension valued at $18.4 million.

“Under the plan, he is entitled to that pension under any circumstance,” said Jefferies.

According to Equifax’s most recent proxy filing to the Securities and Exchange Commission, Smith will also receive health benefits valued at $100,600.

But the severance agreement also said “all decisions relating to the characterization of Mr. Smith’s departure and any obligations or benefits owed” under his employment contract were put on hold while Equifax’s board of directors does an “independent review” of the data breach.

It’s unclear if that means Smith’s departure could later be treated as a firing or as a voluntary departure or termination without cause, which could result in changes in Smith’s ultimate exit package.

In any case, Smith will walk away with much more than a pension. He has been CEO at Equifax for a dozen years, receiving millions of dollars in bonuses and stock and option awards.

Over the past three years, his compensation totaled almost $41.8 million, mostly from stock awards and bonuses, including almost $15 million last year.

Over time, those stock awards have vested, or converted to his ownership, allowing him to accumulate a huge Equifax stake that he has been cashing out over time.

Last year alone, Smith’s “realized” pay of $55.4 million from stock and option awards from previous years. The total included $39.5 million from cashing in options for Equifax stock.

At the end of 2016, Smith also had about $40.2 million worth of stock-related awards that hadn’t vested or he otherwise hadn’t earned yet by meeting the company’s performance goals. It’s unclear whether he was able to claim ownership of any of that compensation upon retirement.

Including Equifax stock he acquired in earlier years, Smith’s stake in the company stood at 285,126 shares as of March 1, worth about $38 million. He also sold $9.7 million worth of Equifax stock in February.

But Equifax’s stock price has plunged almost 30 percent since the hacking incident was disclosed earlier this month. As a result, the value of Smith’s stake in the company has dropped by about $7.5 million, to $30.5 million as of Wednesday.


AJC Business reporter Russell Grantham keeps you updated on the latest news about major companies, CEOs and public utilities in metro Atlanta and beyond. You'll find more on, including these stories:

Never miss a minute of what's happening in local business news. Subscribe to

Reader Comments ...

Next Up in Business

Business stories of the week: Amazon, 2018 priorities, Phipps Plaza
Business stories of the week: Amazon, 2018 priorities, Phipps Plaza

The week had no shortage of business headlines among Atlanta area companies – or perhaps companies that want to become Atlanta area companies. From the Amazon second headquarters search to major development projects, here are some of the big business headlines you might have missed from the past week. Georgia and Atlanta area economic development...
More job cuts coming to Atlanta as part of Coca-Cola restructuring
More job cuts coming to Atlanta as part of Coca-Cola restructuring

Atlanta-based Coca-Cola plans to cut an additional 179 jobs in its hometown as part of a broader restructuring the beverage giant announced earlier this year. In filings with the Georgia Department of Economic Development’s Workforce Division, Coke identified layoffs at three corporate offices in the city effective by the end of December...
Atlanta’s Phipps Plaza makeover plan shifts into overdrive
Atlanta’s Phipps Plaza makeover plan shifts into overdrive

The reinvention of Phipps Plaza into a mixed-use entertainment and shopping complex has been in the works for more than a decade. But the announcement Tuesday of a $200 million-plus expansion, including a flagship Nobu hotel and restaurant, will take that the makeover to a new level, officials with mall owner Simon hope. In Nobu, Phipps will add...
4 of the best ways to turn your home into a cash cow
4 of the best ways to turn your home into a cash cow

Your house is a large expense with many associated costs like a mortgage payment, insurance, maintenance and more. It provides a roof over your head, of course, but since it usually costs you money each month, why not put it to work for you and earn some cash in the process? The following are four ways your house can make you money: If you're planning...
6 things to know about working for Uber
6 things to know about working for Uber

Uber has been making headlines in recent months for everything from a new CEO to industry regulation. But if you want to work as a driver for the service that revolutionized the taxi-transport industry, there is more important information about Uber you'll want to check out. Here are six things you need to know about Uber before working for them...
More Stories