Who Needs A Graceful Exit When It Comes With Buckets Of Cash?
from the fire-me,-please dept
A few months ago we talked about how Craig Conway was “fired” for lying to his board, but still ended up walking away with a $16.5 million severance package. So, while Business Week is reporting that Carly Fiorina had been asking other top CEOs for months how she could “gracefully” leave the company, it looks like grace doesn’t much matter when you’re “fired” with a $21 million severance package. Now, here’s the amazing thing: compensation experts are saying this package is below industry standard and that she could have fought for more. While there’s nothing wrong with executives who negotiate good compensation packages for themselves, you have to wonder why companies continue to give execs such lucrative incentives to fail. Why don’t boards of directors put in clauses that make it clear that dragging a company down voids these types of severance deals?
Comments on “Who Needs A Graceful Exit When It Comes With Buckets Of Cash?”
No Subject Given
> Why don’t boards of directors put in clauses
> that make it clear that dragging a company down
> voids these types of severance deals?
Re: No Subject Given
Because the Boards of Directors are mostly populated by other CEOs themselves. They put in one CEO, give him tons of money, he turns around and gets HIS Board to approve some directors in another company…
Its an old boys network for the most part.
why dont they pur in such terms as to void severen
Haven’t you ever been fired or had a spat with the boss over crap that the boss caused, or just to get rid of you. or heard of such a situation? Sad fact is that bosses and boards of directors don’t like bad news and feel firing the bearers of it is justified. As bad as she was, she did do what she and the board wanted to do for a while, and was not a complete failure by their measure. I say this because by my measure there is another story, but that is off point. Unless someone comes in and fails from the start to perform, they should get the bonus they negotiated, because they are getting compensated not on their performance and salary, but overall, and that bonus or severance is a valid part of what they are owed.
Also, from a stock point of view a stock which bounces up and down reliably is a much better stock to trade than one that is rising all the time, or tanking and staying low, so some “bad” jobs prove to be much better for the stockholders and directors than better performing ones.
sadly the only thing that rewards a company is what they can return over a short term to stockholders (per my scenario above) and not what they provide to either their corporate mission, or customers. They can be horrible there, and be a “good” stock to the right stock players.