From WCCO, our local CBS: Good Question: Why Do CEOs Get Paid So Much To Leave?

[myrna minx]

I did a real hack job with this article, but because the paragraphs are so small it's difficult to piece together a coherent blurb. My reason for posting is I think it's important that windfall entitlement severance packages for the failed CEO set is finally being discussed. We've been led to believe that contracts are imperative for failed CEOs, but job killers if you're a working class union member trying to earn a living wage.

http://minnesota.cbslocal.com/2012/05/14/good-question-why-do-ceos-get-paid-so-much-to-leave/

MINNEAPOLIS (WCCO) – Most of us are lucky to get two weeks’ pay if we get fired.

But when a CEO gets the axe, or resigns to avoid being fired, he or she often walks away with millions in severance.

Why do failed CEOs get paid so much to leave?

Best Buy’s former CEO Brian Dunn resigned after the board started investigating him for having an inappropriate relationship with an employee.

snip

Most CEOs have a severance deal if they’re dismissed without cause and no severance if they’re fired for cause, but often times the exit is negotiated so both sides can save face.

snip
“They want to avoid public scrutiny, they want to avoid prolonged legal action, they want to get back to the business at hand,” said Morgan.

A lawsuit can air a company’s dirty laundry, and without a clear separation agreement a CEO could theoretically take all his or her personal knowledge of confidential company information to a competitor.

[brewens]

1. I think they are in cahoots with the board of directors in some cases. The board brings in

their boy to run things to allow them to loot the company. He only cares about running up the stock price or manipulating things to benefit his buddies on the board. They in turn have agreed to an outrageous win/win deal for their CEO. In the end he's done his job well, even if we think all he did was run the company off a cliff.

[trotsky]

3. It's an incestuous web of CEOs serving on each other's boards.

And they all look out for each other.

[brewens]

9. Yup. You know they tip each other off to make moves that would be obvious

violations if they did it with their own companies stocks. Then the favor is repaid at the earliest opportunity.

[Yavin4]

10. Socialism for Them

Capitalism for everyone else.

[sharp_stick]

2. Our old CEO

should have been charged criminally but instead he was "allowed to resign" with an $18 million dollar golden parachute in order to make it all go away quickly.

Two of his underlings, a CFO and Legal Counsel were criminally charged but skated on a deferred prosecution agreement.

[geardaddy]

4. Dick Schulze quit over the Brian Dunn scandal

http://www.startribune.com/business/151365265.html

[myrna minx]

5. Interesting development.

Can you believe 'CCO even asked the question?

[geardaddy]

6. Glad they did!

[gratuitous]

7. Bad publicity, lawsuits, and get on with life

If a corporation was a person, you'd be describing psychopathy. But this is just how things are done in the corporate world. Bad publicity doesn't do the company any good, and if the company kicks a high-flying executive out of his nice office, they'd better be prepared to either hand over a big wad of cash or face a very expensive lawsuit. On a cost-benefit analysis, it's cheaper to just hand over the dough, and the public will forget all about the unpleasantness, soon enough.

[pscot]

8. Hush money

It buys their silence about what they know.