Steve Jobs famously took $1 in salary and earned the rest of his money the old fashioned way: He got stock options based on performance. Let's contrast this with the latest parade of rich, overpaid CEOs who have been paid millions as they were shown the door.
The practice known as the golden parachute is common in executive circles. No matter how poorly you perform, or even if you leave the company in disgrace, you still get a nice parting gift for your trouble -- to the tune of millions of dollars.
HP, which is laying off 27,000 people for a lot reasons, including general incompetence at the highest leadership level, has paid its two previous failed CEOs a total of at least $36.8 million, according to the San Jose Mercury News.
Details depend on whose figures you believe. First, Mark Hurd, who resigned in disgrace after a sexual harassment scandal involving a paid HP consultant, walked away with more than $23 million -- some reports had the package as high as $40 million to $50 million. Whatever it was, it was a ton of money for a guy who left after also being accused of filing false expense reports.
Next up was Apotheker, fired by HP's board, who reportedly took down more than $13 million after serving as CEO for all of 10 months.
It's not clear what HP will be giving laid-off employees, but you can be sure it will be nothing in line with what these overpriced CEOs got. What's more, imagine if HP could have taken that money spent on failed executives and actually invested it in the business. Over $80 million is not an insignificant sum, even for a company as large as HP.
Not to pick on HP, though. It's just one company in a long line paying off millionaire executives for their incompetence.
The thing I always loved about the Jobs salary story, is the idea that you pay for what is actually produced -- a principle sadly lacking in high-paying jobs, whether in sports or high technology.
The notable exception was when Yahoo let go Scott Thompson because he lied on his resume. In that case, Thompson might actually have been forced to pay Yahoo $7 million for his transgression (which I guess is worse than sexual harassment and fudging expense reports -- at least in CEO circles).
Regardless, the job of any CEO at a publicly traded company is to protect and grow the company stock price. It's one of the reasons that Apotheker was given such a short leash. The stock was tanking on his watch. But if that's the job, then paying these folks for failing is a sick and twisted notion.
If you fail and you're let go, you should do what Thompson reportedly did: Pay back salary because you let the company down and you didn't successfully meet the conditions of your job description. In what universe does the person who didn't do the job get generously rewarded for it? Only in American CEO circles, apparently.
The whole idea of a golden parachute is just wrong. It's time we treated failure with a correct response and let these unsuccessful CEOs walk away without a penny more. They may get to keep what they earned, but they absolutely shouldn't get to take extra. It's a practice that needs to stop. It's not good for the industry and it doesn't make any sense.
— Ron Miller is a freelance technology journalist, blogger, FierceContentManagement editor, and contributing editor at EContent magazine.