As Employees Got Laid Off, CEOs Got Rich

from the how-nice dept

We’ve posted plenty of stories about CEOs getting ridiculous salaries and/or severance packages while they were laying off everyone else at the company. However, now a study has come out showing that we weren’t just picking up a few random cases. It’s an epidemic. CEOs at companies that are cutting jobs are officially being paid ridiculous amounts. CEOs of companies that didn’t layoff their workers, were compensated less. I have no problem with CEOs at companies that are doing well getting paid whatever they can get. However, if a company is collapsing, and workers are being laid off, than there’s no excuse for CEOs to be getting ridiculously high payouts. If someone is brought in to do a turnaround, then maybe – but the payment should be clearly linked to some measurable goals and milestones. Otherwise the companies (and their investors) are simply getting ripped off.

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “As Employees Got Laid Off, CEOs Got Rich”

Subscribe: RSS Leave a comment
Scott says:

No Subject Given

Well, I think you are thinking like a techie. Typically CEO’s are carriers of the touch and negotiators. If given the task of turning around a company that has an unlikely chance of success, he will negotiate what ever he wants to get for the risk. The BOD’s will likely pay out even if the likelyhood of success is low. If the BOD says no thank you then they don’t have any CEO. It is just the way it works.

Mike (profile) says:

Re: No Subject Given

Scott, I completely understand that. But, most of these guys weren’t turn around experts. They were, instead, people who drove a company into the ground, but had created severance packages that gave them no incentive to actually do a good job.

Anyway, a Board’s job is to figure out what’s in the best interests of the company’s shareholders (fiduciary interest) and as such they shouldn’t accept a CEO who rapes them. There’s nothing wrong with making pay conditional on performance. If more BOD’s forced that condition on some of these turn around artists there would be a lot more reasonable deals.

If the potential CEO’s first thought is how he or she can guarantee a huge payout for him or herself (no matter how good or bad a job they do), rather than feeling confident about how good a job they can do fixing the company, the board shouldn’t hire them. It’s that simple, whether you’re a techie or an MBA who understands fiduciary responsibility.

Add Your Comment

Your email address will not be published. Required fields are marked *

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...