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View Diary: Corporate Life In The Rearview Mirror: Mergers & Hackquisitions (57 comments)

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  •  Are comp plans for execs part of the problem (3+ / 0-)
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    cassandracarolina, llywrch, Creosote

    I've reviewed some very sweet golden parachutes in my time, and worked at a place that went through a few takeovers.  From both sides I wonder if comp isn't part of the problem: leaving aside the wall street reaction/dump your options components there are "pay for performance" criteria that are deemed "met" in a change of control.  If it is clear that you aren't going to succeed, finding another sucker to take over your company is often in the best interest of the top executives.

    •  Compensation plans are part of the problem (2+ / 0-)
      Recommended by:
      mygreekamphora, Creosote

      As you say, there are golden parachute deals, and nowadays, you can be paid millions as a CEO for simply stepping aside, much less "achieving" anything.

      Organic growth (and the associated transparency) can be difficult in a tough economy, so acquisitions allow executives to create the illusion of a robust company that's thriving. In reality, they may have leveraged the company to do a deal, or a deal will go sour for some reason. However, given Wall Street's short attention span, it might be worth a few quarters' worth of positive press while the next deal is incubating.

      Those who do not understand history are condemned to repeat it... in summer school.

      by cassandracarolina on Thu May 16, 2013 at 07:09:24 AM PDT

      [ Parent ]

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