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| Re: Why can't I get fired like this? (181842) | |||
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Re: Why can't I get fired like this? |
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Posted by Charles G on Thu Jan 4 16:22:19 2007, in response to Re: Why can't I get fired like this?, posted by RonInBayside on Thu Jan 4 15:50:07 2007. The key is to expand the search. Widen the search enough, and if one candidate says "I want a golden parachute" you say "Have a nice day." The myth is that there aren't enough capable people around for that to be possible.But why would you do such a thing? If somebody is the right person for the job, then pay them what you need to in order to hire them. Don't forget that people don't just show up to be CEO. All those "capable people" have to be hired away from another company -- where they have a healthy salary and benefits as well as stock grants and options that may be vesting over the course of the next 5 years. If you don't guarantee them something that covers what they give up then you won't have anyone to hire. Nardelli's buyout cost the company $210M. It's 0.2% of Home Depot's market value of $85 Billion. While $210M is a big number for any individual -- to Home Depot it's diddly squat -- less than one day's revenue. The minute Nardelli was fired, the market value of the company rose by $1 Billion so that -- effectively -- the shareholders got a 400% return on their buyout with Nardelli in a matter of minutes. It's the paradox of today's executive compensation questions. Companies have gotten so large that they can spend outrageous sums on their top executives without having any financial impact on the company. The most interesting example was Tyco -- which lost 75% of it's value when Kozlowski's shower curtain excess was reported. Yet, over the next 18 months the entire loss in value was recovered as people realized that the CEO's excess had no meaningful impact on the company. |
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