By Matt Andrejczak

In a fresh stab at curbing executive-severance benefits, some companies have been under fire for "golden coffins" that pay the heirs of executives who die on the job unearned salary, bonuses and other compensation.

Shaw Group Inc. (SGR), Johnson Controls Inc. (JCI) and other companies have in recent months made changes to their death-benefit policies or current arrangements. Shareholders have attacked golden coffins for being too excessive. Deals for two executives at Nabors Industries Ltd. (NBR), for instance, are currently valued at $200 million combined.

But, over the past two decades, actual payments made by public companies have been scant, helping to support the argument by corporate boards that golden coffin payments are rare and a cheap way to retain and lure CEOs.

"Because statistically few executives die while still actively employed, the value of such benefits to executives is largely intangible -- and therefore inexpensive to provide," Abercrombie & Fitch Co. (ANF) said in its May proxy statement. The retailer said it has never paid a death benefit to an executive officer's estate or family.

Since 2002, there have been at least seven death benefits paid to an executive's estate, a MarketWatch review of federal securities filings found. There have been more than a dozen payments paid since 1989, according to federal filings and old news reports.

Recent payments include those at Shaw Group, Movado Group Inc. (MOV), and Orexigen Therapeutics Inc. (OREX). Others have been made at Safeway Inc. (SWY), Walt Disney Co. (DIS), McDonald's Corp. (MCD) and Callaway Golf Co. (ELY).

In this year's round of annual meetings, investors at 12 companies were asked to vote if they thought shareholders should have any say on whether the estate of a deceased executive should get unearned salary and accelerated bonuses.

The verdict: In 10 votes so far this year, investors have shot down the proposal in nine instances, based on final and preliminary figures. At Shaw Group, 66.9% of shareholders voted in favor of it. The lowest level of support was at Walt Disney Co, with 27.8%. The rest scored between 32% and 49.2%.

But activists are encouraged. "We're pleased with the support levels," said Con Hitchcock, outside counsel for Amalgamated Bank, which filed five proposals on corporate proxies in 2009. "We've focused board attention on this issue."

Take Shaw. On April 8, its board approved a policy to give shareholders an "advisory vote" on new executive employment agreements that offer so-called golden coffin benefits. Ultimately, Shaw's board will have the final say, a spokeswoman said.

The board at Nabors Industries cut the potential value of golden coffin payments to its CEO and its COO. Johnson Controls revised one death benefit provision that awards a payment equal to two to three years salary upon their death. It had equaled 10 years.

When asked, opponents of golden coffins could name very few instances where companies actually made a payout. There was no mention of any historical death-benefit payments in stockholder-proxy proposals made at 14 companies this year.

And no such master list has been compiled, according to the Corporate Library and other corporate-governance advisory firms contacted by MarketWatch.

In a recent example, Shaw paid the estate of Richard Gill $2.7 million after his March 2008 death. It mostly consisted of one year's base salary, accelerated stock awards, and insurance proceeds, the company's December 2008 proxy filing showed.

Watchmaker Movado is obligated to pay the surviving spouse of Gegalio Grinberg $600,000 for the year ending Jan. 31, 2010 and an annual payment of $500,000 thereafter in equal monthly installments for her lifetime, according to a company filing.

Grinberg died Jan. 4 of natural causes. He built a successful U.S. business selling expensive wristwatches after he fled Cuba when Fidel Castro took power. A few weeks before his death, he replaced an original "death and disability" agreement written in 1994 with a "retirement" agreement.

The old agreement called for his spouse to be paid $395,845 as of fiscal 2009. A Movado spokesperson didn't return calls.

Death benefit arrangements are common for companies ranging from small community banks to Fortune 500 companies. Some deals date back to the 1980s and some don't appear to cost too much. Another characteristic: Small, family-run companies like them.

For instance, International Shipholding Corp. (ISH) agreed in 1988 to pay the estate of its since-retired CEO Niels W. Johnsen $822,000 upon his death, filings show.

The company said it already has sufficient funds reserved to pay the amount. Johnsen's son runs the company. The family owns 24.9% of the ship vessel transporter.

In the past 20 years, supermarket chain Safeway said it made two payments totaling less than $1.35 million to the beneficiaries of employees who died on the job. The company didn't disclose in a federal filing if those people worked at the executive level. The company wasn't able to respond in time for this article. At its recent annual meeting, 38% of shareholders supported the idea of curbing golden coffin deals.

A spokesman for General Dynamics Corp. (GD) said the defense contractor has never made any death benefit payment. The company came under shareholder scrutiny for the existence of a death benefit agreement valued at $8.5 million for the estate of CEO Nicholas Chabraja.

That agreement is set to expire when Chabraja steps down as CEO June 30.

Shareholders have attacked golden coffins because they claim the perks are egregious, such as retention payments even if the executive dies and excessive contributions to cover executive life insurance premiums.

More of these arrangements came to light when the Securities and Exchange Commission changed proxy disclosure laws in late 2006. Before then, it was harder to track down the value of these perks.

Opponents of golden coffins would rather CEOs be paid based on performance. They contend the agreements aren't justified when an executive has already amassed large equity awards.

"Golden coffins should be subject to a sniff test," said David Wise, senior consultant at Hay Group, a global management firm.

-Matt Andrejczak, 415-439-6400; AskNewswires@dowjones.com