The new chief executive of Marsh & McLennan Companies will be guaranteed $3.25 million in salary and bonus, and could receive substantially more in bonus and stock options.

Brian Duperreault, 60, will receive a base salary of $1 million and bonus of not less than $2.25 million for 2008, MMC said in a Securities & Exchange Commission filing. The New York-based services firm, parent company of insurance broker Marsh, named Mr. Duperreault president and chief executive officer last Wednesday.

The bonus amounts in the future are to be determined by the compensation committee. He is eligible for annual bonus opportunities equal to 225 percent of his salary.

He is also eligible to purchase up to 1.2 million shares of MMC stock at the price of $27.275 which will vest incrementally over a period of time with incentives.

The agreement runs for three years.

If he is terminated he will receive any previously earned base salary and bonus.

There is also a 24-month noncompete clause in the contract.

Mr. Duperreault was a past chairman and CEO of ACE Ltd. in Bermuda, where he retained a seat on the company board. He cut all ties when he left for MMC and received a $4.95 million severance package.

His MMC salary agreement does not vary substantially from the contract of Michael Cherkasky, MMC's former president and CEO, who Mr. Duperreault replaced. Mr. Cherkasky signed a three-year agreement with the company in 2005 for a base salary of $1 million and bonus with a minimum of $2.5 million, plus stock options.

Mr. Cherkasky resigned in the face of mounting criticism over the company's poor performance, especially its brokerage business Marsh, which has yet to recover from the loss of contingent commissions it agreed to forego to settle bid-rigging charges brought by regulators.

In addition, the soft market pressures have depressed the broker's results, resulting in zero organic growth in the last quarter.

MMC was forced to give up contingent commissions over allegations that its executives engaged in steering contracts to certain insurance in return for lucrative volume-based contingent commission kick-backs.

Special Reports /

Duperreault Salary Pack = $3.25M Minimum At MMC

Related Stories

Recommended For You