Between us friends, tell me. What’s the biggest severance that you’ve ever paid to an underperforming employee?
Casual baseball fans may not remember Bobby Bonilla, a 57-year-old man who hasn’t played professional baseball since 2001. A six-time All-Star and World Series champion, Mr. Bonilla is perhaps best known for this massive severance about which I’m about to tell you more.
You see, this isn’t the first time that the team has written a check to Mr. Bonilla for $1,193,248.20 since he stopped playing for the Mets in 1999. Indeed, he’s been collecting these checks every July 1 since 2011, and will continue to do so for quite some time.
According to ESPN.com, the Mets agreed to buy out Mr. Bonilla’s contract in 2000, when it had about $5.9 million remaining on it. “However, instead of paying Bonilla the $5.9 million at the time, the Mets agreed to make annual payments of nearly $1.2 million for 25 years starting July 1, 2011, including a negotiated 8% interest.”
Why would the team have agreed to this deal instead of just cashing Mr. Bonilla out? Two words: Bernie Madoff. Mr. Madoff is the former chairman of the NASDAQ who used a massive Ponzi scheme to dupe investors, like the NY Mets, out of their money.
ESPN.com notes that “[a]t the time, Mets ownership was involved with a Bernie Madoff account that promised double-digit returns over the course of the deal, and the Mets were poised to make a significant profit — if the Madoff account delivered. It did not.”
Instead, the New York Mets will pay Mr. Bonilla seven-figs every July 1 (a total of $29.8 million) until 2035.
So, next time you lament over the amount or term of a negotiated severance to resolve an employee dispute or claim, more likely than not, it will pale in comparison to the one between the New York Mets and Bobby Bonilla.