Please, everyone, follow me into a quiet room—we're going to discuss the outrageous $100 million-plus golden parachutes corporate CEOs get, and we wouldn't want Mitt Romney to think we were engaging in an "envy-oriented, attack-oriented approach."
A new study (PDF) looks at the 21 CEOs who've gotten "walk-away packages" of $100 million and up since 2000, for a combined total of nearly $4 billion. Those packages included stock option profits, full-value stock awards, salary and bonuses, benefits from health care to country club membership, pensions and more. The report defends the concept of the golden parachute, but says:
In principle, to protect someone from financial harm if they lose their job due to a merger, that executive needs a single year’s salary and bonus. A CEO should not need three or even two years’ salary and bonus, plus immediate vesting of all equity and pensions, plus benefit and perquisite continuation, as was paid to most of the CEOs in this report. A CEO who is retiring should not need a severance package as well as a retirement package, such as was paid out to John Kanas by North Fork. A CEO who is retiring should not need a pension as well as the continued vesting of stock options and restricted stock, as was paid out to Lee Raymond by Exxon Mobil.
A full year's overblown CEO salary and bonus seems like more than enough to me, but fine. Let's pretend that's reasonable—the reality is still unreasonable.
These astonishing golden parachutes aren't going only to successful CEOs, either. The 21 $100 million-plus CEOs include William McGuire, of UnitedHealth Group, who was "asked to leave" (or whatever other euphemism we apply to rich people who get fired) when "he became embroiled in a stock options backdating scandal." Nonetheless, he got a payout of $285 million. Home Depot stock prices were stagnant under Robert Nardelli, and shareholders and the board were not happy with how much he was making as CEO, but when he left, it was with more than $220 million. Pfizer lost $140 billion (with a B) in market value under Hank McKinnell, Jr., but he walked away with $188 million.
Never mind getting $100 million. If you were fired for being corrupt or harming your employer, would you leave with the equivalent of multiple years of salary? Shoot, if you left a job beloved by every single one of your bosses and coworkers, would you get that much relative to your current pay? Highly unlikely, unless you too are the CEO of a bank or major corporation. Because again we see that America's culture of accountability applies only at the bottom, and that at the top, there is just about no screw-up too big to deny a member of the 0.1 percent their $100 million payout.
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