The Golden Parachute Option for CEOs - 1806 Words

Imagine being in a world where people are paid in cash bonuses, stock options, or generous severance pay when fired from their job due to a company merger, are asked to leave, or choose to retire. This happens to be a reality for many CEO’s and top executives of companies. We live in an economy where mergers and take over’s have become common, and to allow this option for the highest paid employees of a company is arguably unfair. While researching golden parachutes, I formed questions due to the circumstances surrounding this executive option. For example, why should CEO’s, who live very comfortably, be given a compensation package for losing their position due to a company merger or retirement when employee and shareholder’s futures are†¦show more content†¦Once executives were getting these highly substantial payments, shareholders quickly questioned executives for their integrity and motive due to this high increase in payment amounts. There h ave been many debated reasons in support of and against golden parachutes on account of the increase in payment amounts and how the terms of their severance package were written out. It interests me how easy someone can be opposed to golden parachutes from a middle class citizen’s view, where we all want to be paid the same dollar figures as top executives. It’s strongly argued golden parachutes give the feeling that CEO’s and top executives are solely looking out for themselves, not considering how investors and employees will be impacted by mergers. As I stated in my opening paragraph, â€Å"Why should CEO’s be given a compensation package for losing their job due to a company merger or retirement when employee and shareholder’s futures are at stake?† Andrew Ross Sorkin supported this notion in his article Executive Pay: A Special Report; Those Sweet Trips to the Merger Mall in which he stated, â€Å"Mergers and acquisitions can be get-rich-quick paths for top corporate managers, providing a personal incentive to get the deal done, no matter what happens to shareholders. And they are no longer just for chief executives who sell their companiesShow MoreRelatedCorporate Ceos Of Low Wage Employees1049 Words   |  5 Pagesextremely high, production and nonsupervisory workers took home only $35,000 on average in 2013, and a full-time worker making the federal minimum wage earned only $15,080. One of the famous terms being used in correlation to fired CEO s is â€Å"golden parachutes†. This is where CEO s are being paid when they leave the company they are working for and they receive a compensation that is far greater than the salary that they take home. In other words, you get paid more to be fired, than you do if youRead MoreUs Auto Industry Back on Top1658 Words   |  7 Pagesand scrutinized by the general public, the topic warrants much debate. In the 1990’s, total executive compensation increased substantially as companies began offering stock option programs; CEO’s of Samp;P 500 saw an average increase of 150%. While many top U.S. executives continued to receive enormous compensation options throughout the economic downturns of 2001 and 2008, none was more apparent than those in the automotive industry. While the big three, comprising of General Motors, Ford andRead MoreEnormouse Wealth of CEOs1194 Words   |  5 PagesOthers may think it is the amount of petroleum being drilled for. 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Many argue that government intervention could have prevented the backlash and whitewater effect of Nortel’s bankruptcy, but due to corporate ties within the government and the Securities and Exchange Commission the many CEO’s continued to elude the government auditors and the stakeholders. From an ethical perspective, there were several factors that contributed to the rise and fall of Nortel. The initial CEO and founder of Nortel, John Roth, demonstrated altruistic behaviorRead MoreEssay about Critical Theory of Communication in Organizations1644 Words   |  7 Pagescan become more productive and democratic through communication reforms. Humanists feel that meanings are in people not words. Deetz accepts this but goes another step and wants to know whose meanings are in people. The companies meanings, the CEO’s meanings, the perception the companies give as their meanings, this is what Deetz is looking for. 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With most of the world’s financial markets in crisis and recession, the public has becomeRead MoreFlinder Valves and Controls Inc3251 Words   |  14 Pagessince German CEOs usually cannot gain the huge benefit of ‘Golden Parachutes’, a contract provides benefits to a top executive in the event that a takeover of the company resulted in his losing his job with a package of severance pay, stock options or a bonus, as many of their US and UK peers do, the CEO of Mannesmann, Esser, was not motivated to accept the acquisition proposal, since the offer would actually made him ‘flying without no parachute’. Staff in Mannesmann would also oppose to the acquisitionRead MoreFlinder Valves and Controls Inc3267 Words   |  14 Pagessince German CEOs usually cannot gain the huge benefit of ‘Golden Parachutes’, a contract provides benefits to a top executive in the event that a takeover of the company resulted in his losing his job with a package of severance pay, stock options or a bonus, as many of their US and UK peers do, the CEO of Mannesmann, Esser, was not motivated to accept the acquisition proposal, since the offer would actually made him ‘flying without no parachute’. Staff in Mannesmann would also oppose to the acquisition