Even Loser Execs Still Getting Mammoth Exit Pay

'Pay for failure' bleeding troubled firms dry, say critics
By Mary Papenfuss,  Newser Staff
Posted Sep 30, 2011 3:16 AM CDT
Even Loser Execs Still Getting Mammoth Exit Pay
Grabbing for everything they can get.   (Flickr)

(Newser) – Remember the furious demands in the wake of the Wall Street crisis that exorbitant executive exit pay be cut? Not happening. Even big-time loser executives are still reaping incredible windfalls. Take Léo Apotheker, bounced from the top of Hewlett-Packard after a year that saw company stock plummet. His punishment for a job poorly done? A deal worth $13.2 million in cash and stock severance, on top of a sign-on package worth about $10 million, reports the New York Times. Robert P. Kelly collected a mere $17.2 million in cash and stock options when he was booted last month as chief exec of Bank of New York Mellon.

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Inflated compensation packages are galling enough, but "pay for failure" fortunes are particularly infuriating, grouse critics. “We repeatedly see companies’ assets go out the door to reward failure,” said Scott Zdrazil, the director of the labor-affiliated Longview investment fund. “Investors are frustrated that boards haven’t prevented such windfalls.” Part of the problem is that boards seek "super star" execs from outside the company who negotiate the most golden of parachutes. Democratic Texas congressman and senior member of the House Ways and Means Committee Lloyd Doggett blasted the practice. "The whole concept that the only way to get rid of bad management is to buy them off is fundamentally wrong,” he said. (Read more golden parachutes stories.)

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