A Golden Handshake

There are times, in the ratified world of corporation politics, when resignation can be painful but also profitable. Last November Robert Sarnoff, chairman of the RCA Corp. and son of its redoubtable longtime chief Brigadier General David Sarnoff, quit his $326,000-a-year post after the corporation's directors refused his request for a salary boost (TIME, Nov. 17, 1975). The event had all the earmarks of a boardroom putsch. Since 1971, when RCA absorbed a $490 million pretax loss in selling off the computer business that had been Bobby Sarnoff s brainchild, there had been widespread rumors about various directors' dissatisfaction with their chairman.

Whether Bobby Sarnoff was pushed from the job or left on his own, the fact remains that his parting was more than sweet sorrow. TIME has learned that as of Jan. 1, 1976--the day after his resignation took effect--Sarnoff became a consultant to RCA at an annual retainer of $75,000. His new contract runs for ten years. The company's explanation is that Sarnoff s advice is needed by RCA on matters with which he is familiar "by reason of his former employment." The company's gesture seems to be a "golden handshake," a generous farewell present designed to discourage any public recriminations. The expensive practice was widespread in the business world until the mid-1960s, but since then, largely because of stockholders' opposition, it has been rather rare.

Improved Situation. Even though RCA's second largest subsidiary, NBC, has been suffering in the TV ratings race, the corporation's situation seems to have improved, perhaps coincidentally, since Sarnoff stepped down. The company is planning to sell Cushman & Wakefield, Inc., a commercial real estate subsidiary that it had acquired under Sarnoff, and is closing two unprofitable electronics plants. RCA's profits from telecommunications and its Hertz car-rental subsidiary have been healthy. Investors seem to be cautiously optimistic about the new RCA management, headed by President Anthony L. Conrad. RCA stock, which was selling at $18.50 last November, was up to $24.875 a share at week's end.

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