Golden Parachute / by kevin murray

Chief Executive Officers (CEOs) have never been compensated any better than they are today, in which their corporate salaries, perks, and bonuses routinely crush the average pay of other employees at their conglomerate.  To make matters worse, somehow it has become standard for CEOs and other high executive officers to get a golden parachute payment for retirement, replacement, or even for dismissal.  That's a crying shame, a sham to the stockholders, and a disgrace to those who are in charge of corporate governance.


The so-called reason for CEOs to receive a golden parachute is in case of a merger or acquisition in which the CEO might be terminated upon the consummation of the deal.  Give me a break!  CEOs and other highly compensated executives make enough money in one year than most people make in their lifetimes!  These executives are highly placed and most will have no problem with finding some sort of suitable employment at a high salary with some other corporation or end up working as a highly-paid consultant.  In any event, for a real CEO, a golden parachute shouldn't be necessary.  Either he is as good as he claims to be in which case he is already richly compensated or he is some sort of failure and throwing good money after bad is a very bad business practice.


Golden parachutes help to give CEOs a Messiah complex, that is to say, that these particular executives are so important, of such value, that it is the corporation's duty, its obligation, to pay them onto perpetuity.  What rot!  The CEOs primary duty is to the shareholders and not to himself.   Therefore, every dollar, every perk, every benefit given to the CEO is taken from the stockholders as a whole.  It is up to the Board of Directors to quit rubberstamping corporate pay, corporate perks, and corporate golden parachutes and make decisions that are in the best interests of the corporation and its stockholders.  Every man likes to think of himself as irreplaceable, but the fact of the matter is that graveyards are full of people who thought the same thing, and the world still goes on. 


Golden parachutes are simply not necessary for executives that are highly compensated and rewarded well enough to begin with.  However, I am not completely opposed to a golden parachute for a merger as long as the condition would read that all employees that are terminated, replaced, or retired, because of the merger or takeover are compensated with the same percentage compensation package as the CEO.  After all, it's only fair that what the goose receives, the goslings should receive in kind too.


In absence of that sort of democratic and fairness in regards to a corporate golden parachute, then golden parachutes should be retired to the dustbin of history.  At a date and time in which so many employees are employed "at will" and therefore can be terminated at any time for virtually any reason, those that are far higher up the food chain, should also be employedunder those same trying conditions. 


The golden parachute for CEOs is nothing more than "gaming" the system, and the system is gamed far enough already.  Game over.