Make Millions, Get Fired!
While it remains to be seen whether or not the bailout bill will curb top executive salaries and payouts, the topic of CEO compensation has always been the subject of controversy and gossip. In particular, the debate over severance packages circulates around what is fair and whether the executive should really be paid for a job that was not well done. One of the most memorable in recent history was the $210 million exit package awarded to Home Depot CEO Bob Nardelli in 2007.
With all the moving and shaking in the job market, we started thinking: What is the going-rate to fire a CEO executive these days anyway? Is there any correlation between a CEOs approval rating and the quality of their severance package?
Thanks to SEC requirements, various public records and Glassdoor’s CEO approval ratings system, we wanted to see if there is any consistency in how severance packages have been awarded to CEOs that have recently been asked to see themselves out the door.
|Company||CEO||CEO Approval Rating||Severance Package||Status severance package|
|WaMu||Alan Fishman||0%||$11.6M||Fishman refused offer|
|AIG||Robert Willumstad||18%||$22M||Govt. Blocked|
|Freddie Mac||Richard Syron||3%||$9.43M||Govt. Blocked|
|Fannie Mae||Daniel Mudd||22%||$9.43M||Govt. Blocked|
|Countrywide||Angelo Mozilo||0%||$37.5M||Mozilo refused offer|
|Citigroup||Chuck Prince||None||$16M||Accepted Offer|
|Circuit City||Philip Schoonover||3%||$1.8M||Accepted Offer|
|Wachovia||Ken Thompson||19%||$1.45M and accelerated vesting of $7.25M in restricted stock||Accepted Offer|
It seems that no matter what a CEO did to get fired or how low their employee approval rating drop, there is definitely an option of a huge payout at the end of the tunnel. Even though only two of the seven CEOs identified above actually took (or even had a chance to take) their exit package, it still doesn’t seem too justify some of the huge sums of money these executives are offered to simply walk away. I guess if you’re going to be forced out the door, why not try to get every million you can!