Recently there was a discussion here about the topic of executive
compensation. Some thought that the amount that was given to execs
was obscene and indicative of some fundamental skewing of business
that was harming the nation and its economy. Others defended such
compensation plans, arguing that by paying such huge amounts a
company would attract top talent who would more than make up their
salary with increased value for shareholders.
Who was right? Well, of course it's never a black/white issue, but
this latest story certainly illuminates the topic:
http://www.bloomberg.com/apps/news?
pid=20601103&sid=aLbniKlry0Sc&refer=us
( -or- http://tinyurl.com/2loyvy )
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Jan. 22 (Bloomberg) -- Gap Inc. Chief Executive Officer Paul Pressler
resigned from the largest U.S. clothing chain after sales declined
for almost three years.
Chairman Robert Fisher was named interim CEO and president while the
company searches for a replacement, San Francisco- based Gap said in
a statement today. Pressler, who may receive as much as $14 million
in his separation package, is the fifth executive to leave Gap this
year.
Pressler, hired in 2002 from Walt Disney Co. to help restore Gap's
declining stock price, failed to revive flagging sales, losing market
share to teen retailers and discounters. The company said earlier
this month that it was reviewing strategies for its Gap and Old Navy
chains, and Pressler, 50, lowered prices during the holidays to boost
revenue.
``The company didn't meet its financial targets for 2006,'' said Arun
Daniel, a New York-based analyst with ING Investments LLC. The firm
manages $40 billion, including Gap shares. ``Clearly its performance
was disappointing from a shareholder perspective.''
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So this heavy-hitter is brought in and by all measures is a total
failure. He is forced to resign in disgrace. And he is paid up to 14
million dollars for being a failure.
-- Ed Leafe
-- http://leafe.com
-- http://dabodev.com
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