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Top executives at Hawaiian Electric Industries could get payouts totaling more than $17 million if the company’s acquisition by Florida-based NextEra Energy goes through.

Known as “golden parachutes,” the compensation packages are negotiated into employment contracts and paid out in the event that an executive is terminated after a merger or takeover.

HEI CEO Constance Lau would receive $10.6 million in cash and other benefits if she is let go from the company, with or without cause, within two years of the merger, according to her change-in-control agreement filed with the U.S. Securities and Exchange Commission. 

Connie Lau, CEO of Hawaiian Electric Industries, and Jim Robo, chairman and CEO of NextEra Energy, at a press conference announcing NextEra’s acquisition of HEI.

Cory Lum/Civil Beat

James Ajello, HEI’s CFO and executive vice president, would receive $3.7 million in compensation. And Chet Richardson, an executive vice president and general counsel for HEI, would receive $2.8 million. 

When NextEra announced its acquisition of HEI in December, company executives said that no one from HEI would be involuntarily terminated from the company for two years after the sale was completed — the $4.3 billion deal is expected to close by December 2015. 

However, these three executives were exempted from that provision, according to terms of the merger agreement disclosed in SEC  filed by NextEra on Thursday, meaning there is a chance that they will receive the payouts. 

“While there will be no involuntary workforce reductions as a result of the transaction for at least two years after close, HEI executives with change-in-control agreements do not have this two-year protection,” AJ Halagao, HEI’s manager for corporate and community advancement, told Civil Beat by email. 

Rob Gould, a spokesman for HEI, told Civil Beat that “any decisions regarding the leadership of the company post-close will be communicated at some future point.”

Golden parachutes are controversial. Supporters of the large executive payouts say they incentivize executives to facilitate a sale of their companies when it’s in the best interest of shareholders, providing them with several years of compensation in case they are let go. 

Critics say they can reward poor executive leadership and can be excessive. The average payout for a top executive at the largest 200 public companies averaged about $30 million in 2013, according to a study by , a professional services firm. Some of the largest packages can total a quarter of a billion dollars or more.

In 2010, the Dodd-Frank Act, which ushered in financial reforms, required that shareholders be allowed to vote on the executive payouts prior to a merger or sale, though the vote is only advisory. 

The latest SEC filings also disclose that there have been six shareholder lawsuits filed against HEI alleging that the company’s Board of Directors breached its fiduciary duty in approving the merger, agreed to a selling price that was too low and agreed to unfair protections against competing offers. Other companies can submit competing offers to HEI’s board while the NextEra transaction is closing, but HEI board members and executives can’t solicit or encourage other offers.

Company analysts have told Civil Beat that such lawsuits are commonplace in mergers and rarely hold up a deal.

NextEra’s purchase of HEI still needs to be approved by shareholders, the Hawaii Public Utilities Commission, the Federal Energy Regulatory Commission and the Federal Communications Commission.

U.S. Securities and Exchange Commission