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Friday, September 30th, 2011

Outsize Severance Continues for Executives, Even After Failed Tenures

Author:     ERIC DASH
Source:     The New York Times
Publication Date:     29-Sep-11
 Link: Outsize Severance Continues for Executives, Even After Failed Tenures
Stephan:   To understand what is going on in the United States, you really have to get it clear in your head that the uber-rich are operating on an entirely different playing field. Failure on that field means something quite different than it does to a middle class or poor person. This is all part of the trend of the great schism that is separating American into a series of hermetically compartmentalized subgroups. Even in the old Robber Baron days, it was not this bad. These people do not care about their workers and, in truth, they don't care about their shareholders either.

The golden goodbye has not gone away.

Just last week, Léo Apotheker was shown the door after a tumultuous 11-month run atop Hewlett-Packard. His reward? $13.2 million in cash and stock severance, in addition to a sign-on package worth about $10 million, according to a corporate filing on Thursday.

At the end of August, Robert P. Kelly was handed severance worth $17.2 million in cash and stock when he was ousted as chief executive of Bank of New York Mellon after clashing with board members and senior managers. A few days later, Carol A. Bartz took home nearly $10 million from Yahoo after being fired from the troubled search giant.

A hallmark of the gilded era of just a few short years ago, the eye-popping severance package continues to thrive in spite of the measures put in place in the wake of the financial crisis to crack down on excessive pay.

Critics have long complained about outsize compensation packages that dwarf ordinary workers’ paychecks, but they voice particular ire over pay-for-failure. Much of Wall Street and corporate America has shifted a bigger portion of pay into longer-term stock awards and established policies to claw back bonuses. And while fuller disclosure of exit packages several […]

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