Remember the Max? The cost of getting fired is disgustingly lucrative.

[Stevicus]

Boeing's ousted CEO departs with $62 million, even without severance pay


Big Payouts for Getting Fired: Understanding Executive Severance Agreements


I've been fuming over this practice for a long time and wanted to know.

Why are executives continually rewarded gargantuan bonuses and wads of cash for being fired for poor performance, yet a common worker gets absolutely nothing except his or her last paycheck in general?

What's your opinion on this?

Is this a good thing, or are things rotten in Denmark?

I'm not sure about Denmark, but things are certainly rotten here in the good old US of A.

A while back, I started a thread called "A Challenge to Capitalists" in which I asked for a detailed, scientific, mathematical, logical explanation as to why CEOs deserve such huge compensation. What do they actually do that they deserve to receive that much money? Nobody could give any real adequate or informative answer.

 

[mikkel_the_dane]

Makes you wonder why this type of safeguard isn't ever extended to the common worker.

Sure it can be argued that a CEO or executive has highly trained skill sets that makes desirable candidates valuable, but the same can be said for the value of any person working.

If a CEO does bad then fire them like anyone else and they only collect their last compensation with no reward for failure.

Heck, with this lucrative 'insurance' a person can actually make a living by simply getting fired and walking away with money to feed you not for one lifetime, but ten lifetimes plus.

Who pays for all those millions thrown to the wind? The remaining workers do by the labor required to pay such luxurious compensation for doing essentially nothing at all except getting fired.

Follow the link in this post.
Remember the Max? The cost of getting fired is disgustingly lucrative.

 

[mikkel_the_dane]

So that's good isn't it?

How do you know that something is good?

Sorry for asking, but I need to understand how you understand good, before I can answer.

 

[Pete in Panama]

How do you know that something is good?

Sorry for asking, but I need to understand how you understand good, before I can answer.

In order for us to have an meaningful conversation we have to have some kind of shared common value system, one where we prefer the good not the bad, the sacred over the profane, the beautiful not the ugly, etc. My assumption is that you and I both agree that there is an objective good v bad out there and while we can disagree about the particulars we can agree on the absolute. If I'm wrong, and you subscribe to the idea that "good" is anything that suits u at the moment then we're done here.

If on the other hand we're together then let me suggest that money is good. Let's define money as a medium of exchange, a store of wealth, and a unit of account. We should be able to agree that wealth is good, exchange is good, and accounting the process is good --that makes money good.

How are we doing?

 

[mikkel_the_dane]

In order for us to have an meaningful conversation we have to have some kind of shared common value system, one where we prefer the good not the bad, the sacred over the profane, the beautiful not the ugly, etc. My assumption is that you and I both agree that there is an objective good v bad out there and while we can disagree about the particulars we can agree on the absolute. If I'm wrong, and you subscribe to the idea that "good" is anything that suits u at the moment then we're done here.

If on the other hand we're together then let me suggest that money is good. Let's define money as a medium of exchange, a store of wealth, and a unit of account. We should be able to agree that wealth is good, exchange is good, and accounting the process is good --that makes money good.

How are we doing?

We stop here, because I don't believe in objective good and bad. Thanks for the exchange in thoughts.

 

[Pete in Panama]

Not directly in general, I expect it's mostly subconscious. It's just that most of the people making the decisions aren't going to naturally question whether senior executives should be receiving quite as much as they do (and so remuneration constantly increases year on year) because they're also senior executives and they don't want their shareholders to start asking those questions.

What I've found is that the market place is huge & while some managers will work subconsciously, they will not succeed as often as those who think clearly, and market efficiency will prevail rewarding the clever and discarding the foolish.

...nobody is talking about that much of a change. We're talking about the differences like $1 million rather than $10 million ...

Sure I am. It really is possible to find a CEO for $3.95 per year --someone who'll accept the money & say he's a CEO. If you want we can go to $1M & find a better CEO. $10M even better. When I invest in a company I look for one that's doing quite well --I don't care if a CEO's making $500M if he's bringing in $500B into the company.

..."It's possible to hire workers for just $1 an hour but the quality of work ends up being a lot less, so much less that the company ends up being a lot worse off. So they go for the "high price" $15 an hour kind of worker and they're much better off."...

Right now the median wage is more like $21/per hour. Half are making more, and it's because their labor is worth more.

 

[Pete in Panama]

We stop here, because I don't believe in objective good and bad. Thanks for the exchange in thoughts.

Ah, ur one of these folks who will do whatever he can get away with, making up right v wrong as he goes along.

Please pretend u never met me.

 

[HonestJoe]

It really is possible to find a CEO for $3.95 per year --someone who'll accept the money & say he's a CEO. If you want we can go to $1M & find a better CEO. $10M even better.

Do you really think there is no limit to the benefit? Does paying $10 million rather than $1 million mean the CEO will be 10 times better? Why not pay $100 million or $100 billion and get a god-like CEO?

It is ridiculous to suggest that there is a simplistic direct link between paying more and better results. This is especially true given this thread is about a CEO who failed and is still being paid millions? There is clearly a point where increased rewards will encourage more effort or attract better applicants but there will be practical limits to that and I'd suggest we're well beyond those limits at the top end of executive pay. It's about how much they can get away with now.

When I invest in a company I look for one that's doing quite well --I don't care if a CEO's making $500M if he's bringing in $500B into the company.

So you don't care about anything other than the bottom line? How much do you have invested in drug-trafficking, piracy and child-slavery?

Right now the median wage is more like $21/per hour. Half are making more, and it's because their labor is worth more.

And by your argument, if we paid $40 per hour, we'd get even better workers. Or $100, $1000, $1 million... Or is there some magical cut-off that makes your hypothesis work for executives but not for anyone else?

 

[9-10ths_Penguin]

Sure I am. It really is possible to find a CEO for $3.95 per year --someone who'll accept the money & say he's a CEO. If you want we can go to $1M & find a better CEO. $10M even better. When I invest in a company I look for one that's doing quite well --I don't care if a CEO's making $500M if he's bringing in $500B into the company.

For the range of salaries that CEOs actually make, CEO salary doesn't correlate with company performance.

 

[Nakosis]

Boeing's ousted CEO departs with $62 million, even without severance pay


Big Payouts for Getting Fired: Understanding Executive Severance Agreements


I've been fuming over this practice for a long time and wanted to know.

Why are executives continually rewarded gargantuan bonuses and wads of cash for being fired for poor performance, yet a common worker gets absolutely nothing except his or her last paycheck in general?

What's your opinion on this?

Is this a good thing, or are things rotten in Denmark?

These CEOs know how to negotiate.
The companies are desperate to fill the position.

They need someone to take the position who they hope won't screw things up and to take on all of the blame if they do. Generally, these people don't need the job, they are probably wealthy enough to live without working for the rest of their life. The Board has to give them an incentive beyond just a normal salary to even accept the job.

They need someone in a position that very few have experience at and very few want.
It seems outrageous but it is what the company has to do to fill the position.

The company needs someone to make the decisions no one else wants to and have some trust that they'll make the right ones. If the company has the means, they will give whatever they need to attract this person.

Is it good, bad.

It's the company's money. Doesn't mean anything to me.

 

[ecco]

Why are executives continually rewarded gargantuan bonuses and wads of cash for being fired for poor performance, yet a common worker gets absolutely nothing except his or her last paycheck in general?

Because high-level executives, like high-level professional athletes, get a contract that spells out the terms of their employment in including salaries, bonuses, and severances.

If a company wants to lure a highly qualified executive away from another company, they have to make it worthwhile. They also want to know that the executive will stick around for a certain period of time.

 

[Nakosis]

I think it's ludicrous and obscene. Most of us would be content and satisfied for life if we were given 62 million.

Exactly, so why would you go back to work at a high-pressure job if you didn't have to?

Maybe if someone offered you another 62 million?

 

[mikkel_the_dane]

Ah, ur one of these folks who will do whatever he can get away with, making up right v wrong as he goes along.

Please pretend u never met me.

No, my follow human. Crimes are not committed only be my kind. And your kind can't subjectively agree on what good and bad is. So be nice and read the rules of this site.

I accept you as a follow human. Do you accept me as a fellow human?

 

[PureX]

In a world where greed governs all the decisions, and value is determined solely by profitability, these big payouts make sense.

We don't live in that world, so to us, it appears quite absurd. And it is. It's criminally absurd. But here in the United States, at least, greed is considered a virtue. And even the poor think so. So the absurdity continues, and so does all the damage that allowing it to go on, does.

 

[Shadow Wolf]

What we got here is a difference between what reality requires & what you like. Some folks get paid a LOT. Much more than you get paid. The reason is that everyone's labor has a market value. We can try an tinker w/ the law of supply & demand w/ gov't edict but it doesn't work. econ forces are far greater than gov't forces.

Look, in general the world is good and while there are somethings we can complain about, someone making a lot of money isn't one of them. Making a lot of money is a GOOD thing.

Making lots of money because you were fired is bull****. Amd even not fired, it's bull**** some make millions and billions while full time workers are in poverty and we have massive homelessness and starvation. That too is bull****.

 

[Shadow Wolf]

Now I get it. Sorry for missing your point. A CEO, which is worth her money, also knows, that it is not certain that she will succeed in all cases. So she requests a sort of personal insurance, should she fail. From her POV it is not certain that she can get another high paying job again and thus she wants an insurance, that if her contract is terminated, she in effect has an unemployment insurance.

Oh well. These people are supposed to be risk takers and know the risks. Sounds more like a bunch if damn crybaby snowflakes that they think they are entitled to all this should they mess up. That's not taking a risk. It's an allowance to screw up without facing the consequences in ways nobody else gets to have.

 

[Twilight Hue]

Exactly, so why would you go back to work at a high-pressure job if you didn't have to?

Maybe if someone offered you another 62 million?

That's a stellar point. Why would a well compensated executive bother to go back to a high pressure job?

 

[Twilight Hue]

That's a stellar point. Why would a well compensated executive bother to go back to a high pressure job?

Additionally, if you already have 62 million to begin with, where's the pressure to actually do a good job and perform?

If you get fired, who cares? Your set for life either way, weither you perform well or not, so how is it even possible to find a high quality ceo or executive when these type of deals are made?

No wonder products and services have gone in a downhill spiral.

Not a single CEO will give a royal damm weither he or she succeeds or not.

 

[Orbit]

What, some kind of "team work"? The vested interest of the institutional investor's CEOs is for they themselves to make a lot of money. If it were possible for a corp to pay their CEO just $3.95 per year then the corp would save a lot of money and the shareholders would be better off --even shareholders who were major institutions.

It really is possible to hire a CEO for just $3.95 per year, but the quality of leadership ends up being a lot less --so much less that the corps end up being a LOT worse off. So they go for the high price deluxe kind of CEO & they're much better off.

Evidently the quality of the leadership is bad, because they are being fired.

 

[Pete in Panama]

Do you really think there is no limit to the benefit? ...

What are we talking about here? Before I was referring to market forces imposing limits on prices and now I'm hearing you asking about unlimited payments.

What's going on here?