Divestopedia explains Golden Parachute In some cases, golden parachutes are used to prevent takeover.
What Is Included in a CEO Golden Parachute?
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Golden Parachute Advantages and Disadvantages • The Strategic CFO
Is doing an exit plan worth my time and money? Because he's an acknowledged "rainmaker. In other words, he's a can't-miss, managerial genius. Which is why it's so bizarre that this "genius" would insist on being given additional compensation when he's fired for incompetence. Fired for incompetence?
At the very least, isn't that a bit pessimistic? Even more bizarre is why management would agree to those terms. Why would the same management team that agreed to hire this guy at an exorbitant salary agree to reward him for failing?
The Golden Parachute Is Un-American
Consider: A man comes in and tells you he's the Messiah. He recites a long list of accomplishments and victories, and informs you that, because he's so damned talented, you're going to have to pay him millions of dollars a year just to keep him. For openers, wouldn't any self-confident, self-respecting executive with a sparkling track record treat his new position as one of those "win or lose" opportunities?
After all, the company is already compensating you very generously, expecting you to succeed. And if you do succeed -- if you perform your job as expected -- they'll surely compensate you even more generously. But if you fail to do the one thing they hired you to do -- i. Why on earth would you expect them to reward you for failing?
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That's not the American way. Why not just slink away with the millions of dollars you've already made, and write the whole thing off as an unfortunate mistake? Golden parachutes remind me of pre-nuptial agreements.
Could things soon change? Executive paychecks in are expected to come in about 30 percent lower than the year before , the Wall Street Journal reports.
Shareholders don't seem to mind the recent trends. Only 36 of 2, companies had shareholders vote in opposition to CEO compensation levels, Forbes reports. Tap here to turn on desktop notifications to get the news sent straight to you. Help us tell more of the stories that matter from voices that too often remain unheard.
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