Forget the fireworks display planned for Chrysler Corp.'s annual shareholders meeting in May.
Not only have Chairman Robert J. Eaton and his persistent investor Kirk Kerkorian agreed to a five-year peace treaty. Stunningly, the biggest winner in the Feb. 8 deal appears to be irascible former Chairman Lee A. Iacocca.
He walks away with $53 million, ($32 million from Mr. Kerkorian's Tracinda Corp. and $21 million from Chrysler) to compensate him for stock options Chrysler stripped from him for siding with Mr. Kerkorian's aborted bid to buy the company. He and Chrysler agree to drop all lawsuits against each other.
But there are limits to this reconciliation. Don't look for Mr. Iacocca's name to go up on the new executive office tower at Chrysler's Auburn Hills headquarters.
"We've already decided it will be called Chrysler World Headquarters," says Chrysler spokesman Steven J. Harris.
Not walking away empty-handed, Mr. Kerkorian gets:
* A board seat. But it goes to James D. Aljian, a trusted longtime Tracinda executive, and not Jerome B. York, the former Chrysler chief financial officer Mr. Kerkorian lured away from IBM Corp. to revive his moribund buyout. York will stay on as Tracinda's vice chairman.
* An expanded stock repurchase plan as Chrysler doubles from $1 billion to $2 billion the amount it will spend buying back shares this year and another $1 billion next year.
* Changes in Chrysler's corporate governance policies that, among other things, will allow an investor presenting a cash or otherwise fully-financed buyout offer to buy more than 15% of Chrysler's stock, without triggering a defensive shareholders' rights plan. Previously, the plan, known as a "poison pill" because it makes a takeover much more costly, was triggered when any one investor held a stake of 15% or greater.
Directors will be encouraged to own more Chrysler stock, and directors will be compensated in stock rather than cash for serving on the board.
Kerkorian will have to sell some shares as that buyback progresses because the agreement requires that Tracinda's stake not exceed 13.6% of Chrysler's outstanding shares.
* Chrysler agrees to seek buyers for its non-automotive