Atop the list sits Lee Raymond, former CEO of Exxon Mobil, who received an estimated $351 million payout in 2006. Former Pfizer chief Henry McKinnell’s payout last year of $213 million ranks second, while former Home Depot CEO Robert Nardelli’s $210 million is third.

Rounding out the list: James Kilts of Gillette ($165 million); William McGuire of UnitedHealth Group ($153 million); Leonard Schaeffer of Wellpoint ($137 million); SouthTrust Bank’s Wallace Malone ($135 million); Philip Purcell of Morgan Stanley ($94 million); and Conseco’s Stephen Hilbert ($72.5 million).

While Merrill has pointed out that O’Neal, 55, isn’t receiving severance or a 2007 bonus, Paul Hodgson, senior research associate at the Corporate Library, noted that by classifying his departure as a retirement, the board allowed him to hold on to his $161.5 million in stock and retirement benefits. O’Neal’s retirement and equity plans--both approved by the board--dictated that once O’Neal reached the age of 55, he was eligible for retirement.

“He was therefore immediately vested in his retirement benefits--which cost, at his age, twice the amount they would have had he retired at 65,” Hodgson said in his report. “Only when boards wake up to the fact that long-term incentives that are supposed to be based on service and performance should only vest if those services and performance conditions are met will such a situation be impossible,” he added.

A Merrill spokeswoman was not available for comment.

Hodgson also slammed Merrill’s board for failing to oversee O’Neal’s strategic decisions, as well as its lack of succession planning.

“Since it looks as if the board may be considering an external candidate who would likely cost more than $161.5 million to recruit, it [the board] appears to have failed in yet another of its most important duties: ensuring a proper succession plan is in place,” he argued.

Filed by Jeff Nash of Financial Week, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com