In an interesting article I picked off of Google News
it seems HP is being sued by Stockholders because they gave their last CEO a huge bonus for/after leaving of ~$42 million.
I don’t know about you, but it has always confused me why an exec who hurt a company gets any kind of bonus upon leaving. They are lucky the don’t get a big kick in the ass. It isn’t like the normal schmoe who screws up and gets fired gets anything but shown to the door. Why do execs get treated differently?
You want to give execs bonuses? Give them stock options when they are hired. They have to execute the options prior to leaving or they lose them completely. Carly probably wouldn’t have been as well off when she left.
An excuse for doing this is because you want to attract the best talent… but what kind of talent? The best talent to scam the best deal? Do you really want to pay these huge bonuses to execs whether or not the company does well or not?
One final thought, for 99% of the workers in any given company, probably more for bigger companies, bonuses are based on how well the company does, if the company doesn’t do well, you don’t expect a bonus. Even if I worked my butt off and did a great job I wouldn’t expect to get a bonus if the company itself was flopping around doing poorly and no one got bonuses, why should execs be any different? I do expect to be paid for my services but that is salary, that is prenegotiated/fixed and everyone knows it up front and if I don’t do my job I get fired.
I always think of it more as a “just keep quiet about all the dumb stuff _we_ did” payment. The board gets to pick a scapegoat and send them off into the wilderness, and blame all the badness on that one person. Maybe they also choose to change whatever behaviours they believe really caused the badness. But they have to make sure that the departing CEO doesn’t spend a lot of time bad-mouthing the board, and their part in the bad times; they can’t do that with an NDA, or an NCA, because they didn’t negotiate that when they hired them on, because people at that level have good lawyers who say “don’t sign this”. So, they have to bribe the departing CEO not to talk … too much.
What you just said clicked….I just heard an article on NPR that mentioned concerns that CEO’s make as much the day they clean out their desks, as people who clean toilets make their entire lives..??