updated 1/10/2007 7:09:24 PM ET 2007-01-11T00:09:24

Bruce Karatz, who stepped down last week as chief executive of KB Home, could get as much as $175 million in severance pay, pension benefits and stock options despite leaving the homebuilder amid a stock option controversy, according to a published report.

The multimillion dollar windfall, experts say, may be possible in part because Karatz wasn't fired. The 61-year-old agreed to retire Nov. 12 and repay KB Home $13 million after an internal report concluded the home construction company incorrectly reported stock option grants.

According to KB Home's proxy statement, Karatz would get a severance pay equal to the sum of what he earned in salary and incentives over the last three years _ roughly $80 million, the Los Angeles Times reported.

Karatz also has a special executive pension plan guaranteeing him $1 million a year for up to 25 years in retirement, and vested stock options that aren't in dispute worth about $70 million, the newspaper reported.

"He might not like the hit to his reputation, but he's certainly not going to take one to his bank account," said Patrick McGurn, general counsel of Institutional Shareholder Services.

Mark Fabiani, a lawyer for the KB Home board, refused to tell the newspaper whether directors would move to revoke Karatz's severance pay or retirement benefits. He said those discussions would take place, but haven't begun.

Thye Times said lawyers for KB Home wouldn't comment.

The board concluded Karatz and former human resources chief Gary A. Ray "selected grant dates under the company's stock option plans," the company said. It did not directly accuse Karatz of wrongdoing. Ray was fired.

Karatz was the latest corner-office victim of so-called backdating of employee stock options without properly accounting for the maneuver. So far, at least 30 executives and directors have lost their jobs at a number of companies.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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