HOUSTON (AP) _ Enron Corp. Chairman Ken Lay turned down up to dlrs 60.6 million that he stood to receive once the nation's top buyer and seller of natural gas is merged into its smaller, but stronger rival Dynegy Inc.
``He has told the employees that he has given a lot of thought to this over the last few days and in light of the circumstances surrounding the company and after listening to the employees he has decided the best thing to do is waive his right to the payment,'' Enron spokesman Vance Meyer said.
Lay decided it best to forego the Enron compensation package after consulting with employees Tuesday. He let those who work for him know of his decision via voicemail.
Meyer said the compensation package was the only merger-related payment Lay was eligible for from Enron. A Dynegy spokesman, John Sousa, said the company was unsure if Lay could receive a retirement package from them.
Enron had a conference call scheduled for 1430 GMT.
Dynegy's purchase of Enron, worth at least dlrs 9.8 billion in stock, would trigger a clause in Lay's contract that gives him a lump sum of dlrs 20.2 million for each full calendar year remaining in his contract if there is a change in control of Enron, according to documents filed Tuesday with the Securities and Exchange Commission.
Lay's contract with Houston-based Enron runs through 2005.
Dynegy executives have said they hope to complete their acquisition of Enron by next summer. The Houston-based energy marketer will assume dlrs 13 billion of Enron debt. The Enron name will vanish when the deal is completed.
Investors continued to bid up both companies' shares Tuesday, in the second day of trading following announcement of the deal. Dynegy shares rose dlrs 2.63, or 6 percent, to close at dlrs 44.94 on the New York Stock Exchange, where Enron shares rose 74 cents, or 8 percent, to close at dlrs 9.98.
Enron shares have gained 17 percent since Thursday, the day before the merger was announced, but the shares are still a fraction of their 52-week high of dlrs 84.87.
Dynegy entered talks to buy Enron last month as the trading giant's stock price plunged about 80 percent in the weeks following Enron's posting of a dlrs 618 million third quarter loss. The company also disclosed a dlrs 1.2 billion reduction in shareholder equity related to partnerships run by company officers, which allowed Enron to keep about half a billion dollars in debt off its books.
Those partnerships are now under investigation by the Securities and Exchange Commission.
Enron ousted chief financial officer Andrew Fastow, who ran some of the partnerships, and restated its earnings back to 1997. But those actions failed to restore investor confidence.
Chuck Watson, Dynegy chairman and chief executive, will retain those roles for the combined company while Lay steps down when the deal is done.
Enron spokeswoman Karen Denne said Tuesday the compensation provision given a merger or other change of control has been in Lay's contract since 1989. Such protections are common for chief executive officers, she said.
In February, Jeff Skilling replaced Lay as president and CEO of Enron and Lay retained his title as chairman. Lay stepped back into the other roles when Skilling unexpectedly resigned in August, citing personal reasons.