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I'm not defending a damn thing except the fact that the agreement of a specific severance package was legally binding, no matter what financial shape the company was in.
Do I think what they do is smart? No. Do I think it's "fair?" What is fair? It's irrelevent, that's what.
Besides that, who the f'ck are you to tell companies and their shareholders how they may, and may not compensate their management?
If I'm defending anything here, it's legel obligations... oh, and freedom for companies to do what they want without ninnies like you standing over them trying to micro manage their affairs according to your irrational idea that life is supposed to be "fair." >>
Did I ever say legal obligations or contracts should not be upheld? So quit harping about an issue that misses the point entirely: justification of outrageous compensation levels without any accountability is grossly stupid, or unfair if that's what you want to call it. I certainly never used the term fair, or ranted that life should be fair.
Your defense of the situation is pretty ludicrous; by your accounts, if a company's board of directors makes poor decisions when choosing executives, then employees and shareholders should suffer quietly as a result. What if the severance package was $100 million and not $9.5 million? According to your none-of-my-business attitude, it's just as reasonable as 0 dollars. News alert to you: even in thriving capitalism, oversight and limited regulation are critical to maximize public benefit.
rahvin,
The problem with your argument is that you give excessive credit to the CEOs, and appear to ignore the many unsuccessful executives in the world. There's plenty of business evidence that the majority of these people aren't Supermen and women, so you neither need to worship them or defend compensation levels across the board as reasonable.
How many Jack Welsh, Bill Gates and Lou Gerstner's are there in the world? Very, very few, but guess what, as a group, execs reap excessive rewards. There are a lot more unsuccessful execs out there, and unlike regular employees, when they are canned (never officially "fired" of course), they walk away with absurd severance packages. I have no problem w/ the successful executives making a ton of money; the problem is how overpaid the average executive is, and how they aren't held accountable for failure. As long as U.S. corporations and their boards of directors approve contracts with absurd golden parachutes, and no responsibility for lack of success, employees and investors get shafted.
And guess what, as relentless as Gates' pursuit of software dominance was, even as CEO, he was but one cog in the company machine. How logical is it on the one hand to say CEOs are as responsible for corporate failure as the thousands of employees they manage, and on the other hand a CEO solely receives credit for successful operations? Obviously, the employees doing day-to-day work count either way you look at it.
As far as Chrystler execs jumping ship, that happens simply because the grass looked greener on the other side once Daimler reigned in compensation. Your argument is weak, since it represents one transparent example. Of course those execs will jump ship if they can continue to find a sweet compensation package elsewhere, and their new masters are not willing to throw money at them.
The national economy grew at ~ 4% annually throughout the 1990s, while executive compensation shot through the roof. There is really very little evidence that the compensation gains were in any way attributed to performance. Much of the profit gains were realized in "downsizing" employees and the resultant improved "productivity". It doesn't take a genius to reduce headcount. Now if you still want to worship execs are gods, then that's your right to do so.
