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.
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.
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 I agree. You know, I was wondering about the fact that when teams fail, the blame usually falls on the coach, who is fired. But when businesses do the same, the CEOs still pocket massive amounts of money.
That's a great analogy actually. When your leader fails to inspire, you shouldn't reward them with obscene wealth. Instead you should boot them to the curb with nothing.
Boards typically rationalize huge golden parachutes by stating they're needed to attract top talent. But IMO, the parachute contracts need to have some contingencies written in -- e.g., if the board fire you, you get nothing; if you quit, you get nothing; if you have to leave for medical reasons, you're reimbursed at a certain level.
Another thought: When companies like HP have such massive layoffs, it might make sense to garner some support from partners and customers by forgoing raises and making that known -- the great PR from that might create better morale, better productivity, and even increased sales.
That would be a sensible approach and I'm shocked that these types of contingencies aren't built into the contracts today. Maybe I'm crazy, but if you're paying someone millions to come on board, should they get fired, the gig is over immediately. You don't pass go and collect $20 million. You leave. That's it.
We wish to apply for jobs worth several million a year, with even more in options and perks, then find out we are either incompetent or faked a resume or cheated on expenses or harassed someone, and get shown the door with even MORE money.
But one critique of what Lenovo's CEO did.. is that it could set up the CEO for lower future bonuses -- b/c the company will think he doesn't really need a large bonus based on this action... so why would a CEO want to do something that would hurt his future income?
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The call (or, should I say, the Twitter DM) finally arrived. My Google Glass is ready. All I need to do is travel to Manhattan and fork over $1,500, and this piece of cutting-edge technology will be all mine.
When a new technology comes along, the standard reaction seems to focus on the most negative aspect of the device at the cost of all positive possibilities.
Recently, the Obama administration has been of two minds where privacy rights are concerned. On one hand, you have an administration that vowed to veto CISPA and mandated open data for government websites. On the other hand, you have an increasingly out-of-control Department of Justice on a fishing expedition at AP and demanding legislation to let the FBI wiretap private, encrypted communications and levy fines if a company fails to comply.
These days, even some usually techno-friendly people have their hackles up about the potential of Google Glass to surreptitiously record video or take pictures. I've heard more than one tech savvy friend bring up "the creep factor," the ability of a weird guy to secretly record you.
Cisco's rumored sale of Linksys suggests we may have problem with innovation and profit at the edge of our Internet, and that could be critical to the evolution of many Internet-delivered services.
Good news! The US gross domestic product grew by 5.5% last quarter. But does that number accurately reflect the value created by the information economy?
When Reiter gets incensed over incompetent Verizon FiOS order-taking and support, he broadcasts it via Twitter. Did it do any good? How should your company offer Twitter support? Watch this for all the answers.
Evidence shows that you can tweet too much. Sites and services like Twitter and Facebook are a good place to reach your audience, but think quality over quantity.
How do you recognize an Internet bubble when you see one? Saunders explains how all bubbles have four symptoms in common – and takes a swipe at Google and Twitter into the bargain.
The sky is falling! And in other news, Saunders explains why he’s predicting a second Internet bubble – this one based around the current craze for social media.
The whole Amazon.reader debate is a double-stupid. It's stupid to think that there's any e-book buyer who doesn't know Amazon's URL, and it was stupider to let ICANN launch the whole free-form TLD initiative to start with.
Subsidized handsets, rather than locked handsets, should be the focus of regulators. We're not getting good deals, not fostering innovation, and weakening our power as buyers.
Showing results is the best way to win over social business doubters, according to Mary Maida, Medtronic lead information solutions manager. Internet Evolution's Mitch Wagner interviewed Maida at the E2 Innovate conference.
Big-data and analytics tools enable marketers to understand customers as individuals, identifying unmet needs and addressing each customer as a "segment of one," says John Kennedy, VP corporate marketing, IBM.
New York's Metropolitan Transit Authority is conducting a pilot test of digital kiosks to guide subway users to where they want to go more efficiently and at lower cost.
The whole Amazon.reader debate is a double-stupid. It's stupid to think that there's any e-book buyer who doesn't know Amazon's URL, and it was stupider to let ICANN launch the whole free-form TLD initiative to start with.
While NFC's original goal was to enhance mobile commerce applications, it is finding its way into a number of other uses, which is creating both opportunity as well as challenges for IT departments.
Enterprises would like to move to cloud computing but are hesitant because they are concerned about providers’ ability to secure company data. Here are some tips that help to ensure that if breaches occur, the business is not left holding the bag.
Edmunds separates customers into segments based on the info it collects on its site and from partners, and uses that to push out custom content, said Brian Baron, director of business analytics for Edmunds.com, at Predictive Analytics Innovation Summit.
So here we are, the last day of the 2013 US Open Golf Championship at Merion, and Phil Mickelson -- who has been a US Open runner-up five times now but never taken the trophy -- is right up there at the top of the leaderboard.
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