Dave, In a message dated 7/21/2008, I wrote: I'll read the article
and check out some other info.... In the meantime... Check out some of
the golden parachutes that CEO's of failed ventures in the private
sector are getting. . In the public sector, at least the voters can
vote out board members who approve inappropriate out-a-sight salaries
and other inappropriate expenditures. (E.g., unusually high frequency
of.... Purposely chosen from 2002, when thousands lost jobs and pension
funds, but before the current economic crises: The Business Review
Should Trans World Entertainment Corp. ever change hands, Robert
Higgins,
if he chooses to leave, he will receive $3.1 million for
doing so.... Such contractual severance packages are
considered an
integral part of the pay package for any company that wants to attract
and retain top people
. Generous severance packages and other
forms of executive compensation have come under new scrutiny in the past
year in the wake of corporate scandals. When Enron collapsed, its
executives bailed out with their golden parachutes intact, angering the
public and lawmakers alike
. David Evans, managing partner at
Albany CPA firm Urbach Kahn & Werlin, said of the Enron scandal: "But
when you get right down to it, the agreements are staying in place
because they serve a vital purpose. The fundamental thing is, you need
these managers, and they need to be well-compensated. Otherwise, you
will not attract the top talent. If you want to be competitive, this is
what you've got to do."
It is not even necessary for a change of
control to take place. Robert A. McCormick, who retired as TrustCo CEO
on Nov. 1, earlier had announced that he would cut his salary in half
beginning in 2002.
In so doing, he triggered his severance agreement, which states that any
reduction in salary counts as a "termination." He therefore received
2.99 times his pay, or a total of $8.5 million. He worked at the lower
salary for 11 months before abruptly announcing his retirement. He then
signed a $6 million, 31/2-year consulting contract with the company.
That put his annual pay at $1.7 million, $200,000 shy of where it had
been before he cut it in half
.
The Sarbanes-Oxley Act of 2002 made big some changes in corporate
governance rules that will affect some corporate pay practices, such as
loans to insiders and stock options. But golden parachutes were not
touched
Full text at http://tinyurl.com/59uvs3
<http://tinyurl.com/59uvs3>
"When the Bough Breaks...."
