Good day friends and readers,
Imagine yourself working at a large home improvement store for several years. You start saving into a 401k plan, and with the company’s matching contribution ( maxed at 5% ), you see an incremental but sustained growth in your holdings. Enter Bob Nardelli as CEO.
His blunt, critical and autocratic management style turned off employees and the public. Nardelli was notably criticized for cutting back on knowledgeable full-time employees with experience in the trades and replacing them with part-time help with little relevant experience.
Prior to his departure in 2006, you see your stock dip, employees become apathetic and customers rail against the lack of knowledgeable associates. That is what you are left with….he leaves ( resigns ) and walks away with $210 Million dollars.
That was me in 2006….working for that same company and not having the smarts to leave before or even shortly after that happened. I stayed with that company for another 5 years, even as the former CEO, now CEO of Chrysler was up on Capitol Hill begging for bailout money.
Golden parachutes defined per Wikipedia: A golden parachute is an agreement between a company and an employee (usually upper executive) specifying that the employee will receive certain significant benefits if employment is terminated. Sometimes, certain conditions, typically a change in company ownership, must be met, but often the cause of termination is unspecified. These benefits may include severance pay, cash bonuses, stock options, or other benefits. They are designed to reduce perverse incentives — paradoxically (and ironically) they may create them.
The above links showcases some of the best of the worst.....WORST.
I have never griped about CEO’s regular pay…..give them millions….cool. They hire thousands or tens of thousands, but none of that equates to the tens and hundreds of millions of dollars they walk away with in the face of a company in decline!
Realizing that most of these things happened in the years prior to the proverbial "bubble burst", but they are no less relevant or important, even now.
Tomorrow I will showcase exactly what my home state is losing during this recession....good grief....well, nothing really good about it.
Have a good day everyone.....catch you tomorrow,
Trevor M Dodge
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