Do a Horrible Job – Get a Raise!
Get Fired – and Get an Even Bigger Raise!
I don’t have to tell you that the world of Big Business is topsy-turvy, especially when it comes to compensation for CEOs and other executives.
Big paychecks and even bigger buyouts are the norm – have been for years.
Even when a company is completely flopping around like a dying fish – plummeting stock, lost market share, sinking profits, even bankruptcy… these CEOs get the big bucks. Often in the form of golden parachutes that let them float away unscathed. (I wish somebody would pay me that much to go away – what do I gotta do to get in on that?!)
Even during the Crash and the aftershocks we’re still feeling… CEOs keep making more money. According to research firm Equilar, CEO pay has gone up since 2007 (although there was a slight dip in 2008 and 2009). In fact, they made 24% more when you compare 2010 to 2009. They’re averaging about $9 million a year.
One of the highest paid CEOs is Phillipe Dauman, of Viacom. In 2010, he was paid $84.5 million! In 2011, it dropped to a paltry $43.1 million.
But what really gets me are those “golden parachutes” I was talking about. And a recent case really has me steamed up.
Janet Robinson was the CEO of The New York Times Co. Was.
She was asked to leave last December. The board felt so bad about firing her, they sent her off with a nice little goodie bag: $23.7 million in pension income, performance awards (you read that right), stock, and – ahem – consulting fees.
What did Robinson do to deserve this windfall?
Well, during her years at the Times Co. (Ticker: NYT), the company’s stock took an 80% dive. And to give you an idea of how the company, which owns The Boston Globe and About.com among other online and offline publications, is doing, let me tell you this:
Robinson’s exit package is more than the company has made (we’re talking net income) in the past four years combined.
(Meanwhile, longtime newsroom employees get peanuts, aka “early retirement packages,” and they freeze pension benefits.)
This crazy CEO compensation has to stop, especially for those execs who fail at their jobs. Shareholders should be speaking out forcefully about granting huge payouts to fired CEOs.
Unfortunately, their voices could be drowned out. Big Business and Wall Street take care of their own after all.
Let me know what you think of Robinson’s exit package and CEO compensation overall by commenting below.
To Safe, Secure, and Lucrative Investing,
Peter J. Bryson
Founder, Wealth & Freedom Foundation