Bailouts... to Pay a CEO's Severance?

Should Mack Whittle have been able to receive $18 million in "severance" when he retired from South Financial Group? You make the call (all the following bullets come from this Propublica article Bank Got Bailout, CEO Got Golden Parachute, but were rearranged to get a clearer timeline of the events):

• Under Whittle, the bank grew to be the largest based in South Carolina, with $13.7 billion in total assets and 180 branch offices in Florida, North Carolina and South Carolina.
• But the bursting of the housing bubble has hit the South Financial Group hard. Since the beginning of 2007, the bank's stock has fallen sharply from above $26 to about $3.50 today.
• Whittle's plans to retire had been announced Sept. 5 -- before the worst of the credit crisis and a month before Congress passed the $700 billion bailout. The company said then that Whittle would retire by year's end.
• The bank booked a $25 million net loss in its third quarter.
• But on Oct. 24, shortly after the bank announced that it would be applying for bailout money, the bank decided that Whittle would be retiring early the next week.
  
• Whittle's successor had yet to be named, and no reason was given for the earlier date.
• The South Financial Group, South Carolina's largest bank, announced earlier this week that it had been approved to receive $347 million from the U.S. government.
• Because of the timing, he's free from golden parachute limits that come with accepting bailout money.

I don't know near enough about Mack Whittle or South Financial Group to understand why he retired early. However, does it make sense that a bank that just lost more than 85% of its equity value, and is in such need for liquidity that it tapped the U.S. taxpayer for equity, reward its CEO at the height of the financial crisis when they are leaving the problems behind?

The finishing paragraph in the article from corporate governance analyst Paul Hodgson rings true:

"If you and I decided to retire, we might get what's left of our 401(k). But for some reason the rules seem to be different for executives. They get severance even though they're retiring. There's no logic to it at all."