Laughing All The Way To The Bank
from the executive-compensation-silliness dept
News.com has an interview with a “compensation expert” (I wonder how you compensate a compensation expert?) concerning the state of executive compensation in Silicon Valley. Over the past year there have been a ton of stories about ridiculous CEO payouts even as a company was collapsing. Remember Webvan and George Shaheen? How about Pets.com giving out millions to the team who shut the company down? More recently AOL tried to hide the “lavish” stock option bonuses they gave execs by claiming they gave no cash bonuses. The compensation expert thinks this is all very bad for the industry. It used to be that people went to work for tech, and took a risk. They got a lower salary and lots of options to increase the upside if it worked out. Now, they’re demanding lots of cash salary, huge optiong grants, and ridiculous severance packages. In other words, they have little incentive to do well. The article also discusses the potential impact of having to expense stock options (something most tech companies are violently against, but which increasingly sounds like a good idea). The fact is that accounting for them as an expense is much more accurate – and the point of financial statements is to get the most accurate picture possible of the state of the business.