Tuesday, April 07, 2009

Golden Parachute?

Lets say a there is a CEO of a company, this company is losing 1 billion dollars a day. You need to get rid of the CEO but formal board review meeting can take 30 to 60 days to complete. (Not to mention if the CEO tries to fight it or stall it with lawsuits etc.) Every one of those days you you are losing a billion dollars. If I offered the CEO $100 million dollars to leave today am I doing the right thing for the company?

Hell yes I am. What I think people fail to realizes is that the worse a CEO is doing the more incentive there is too get rid of him quickly and without a fuss.

You hear all of this bullshit about they paid millions of dollars to this executive who ran the company into the ground and lost money (people are actually outraged)... they paid that to get him the fuck out of there quickly so they have a shot at saving the company.

A large golden parachute is not a badge of honor it is an amount of money equal to how much the board thinks you are a fuck up and the company is better without you.

It is why people pay alimony or large divorce settlements..the cost is worth it to stop the bleeding of cash and terminate a rotten relationship as fast as possible.

I guarantee you if you look at the correlation the bigger the pay out in a divorce settlement the bigger the bitch of a woman involved and the more relived the man to settle and be done with her. Companies are no different.


Sundar said...

Why shouldn't it be possible to fire a CEO on the spot just like anybody else?

Brian in Mpls said...

It is more of a political appointment by the board of directors then it is a hiring and termination situation. Just like the president once elected it is a little harder then just firing them if they mess up. Additionally the CEO and the performance of the CEO is different for example if an employee commits fraud they are fired but if a CEO commits fraud it means jail time.

~Sheila~ said...

Maybe it's the man who's a big bitch.
Maybe the lady has the money..

Either way, I get what you are saying. I'd pay to get rid of someone too.

Muffy Willowbrook said...

I'm gonna go out on a limb then and say Commander's ex wife is a total beeeyooootch!

Bill From Gainesville said...

I love that last paragraph --- Its like the old joke. Why is it so damn expensive to get a divorce? because its worth it.