Parachutes

Parachutes Over the past week, numerous articles have been written about the huge severance packages paid to departing executives. The hubbub has been sparked by the announcement that Nabors Industries’ 81-year-old chief executive, Eugene Isenberg, is receiving a $100 million “severance-like” payment, but he isn’t leaving the company. Instead, he is stepping down as CEO, an action which triggered a clause in his contract to receive the payment. You got it, an 81 year old was finally asked by its board to step down – and he received $100 million in return! Big severance packages – like the $140-million payment to Michael Ovitz in 1997 after his brief stint as president of The Walt Disney Co. – have sparked corporate-governance controversies in the past. Robert Nardelli received an exit package valued at $210 million, including $20 million in cash, when he left The Home Depot, Inc. in early 2007. More recently, Leo Apotheker received more than $13 million when he was booted by the HP Board, and Carol Bartz received more than $10 million when she was ousted by Yahoo. Yours truly is not terribly sympathetic with the protesters camping out on Wall Street because I am not sure (nor do I think they are) what aspect of the financial services business they are protesting against. However, when I see tens of millions of dollars being coughed up for failures, and egregious financial packages paid to people like Isenberg, I feel like protesting as well.