Wednesday, April 26, 2017
CEOs have a PR problem and it stems from their compensation. Even if they fail in their jobs, they are rewarded, sometimes excessively. Consider these wages of failure. For being unable to turn a company around, the CEO walks away with $186 million. Compensation consultants will argue that the amount includes her stock holdings, but how did she own so much equity? The board endowed her with huge holdings on the premise that she would make good and save the company. Instead, she sold it for a tidy amount. There are reasons why average citizens are cynical when it comes to executive pay. It seems to be a heads-I-win, tails-I-win game. Boards have been struggling with the compensation issue for decades and they seem no nearer to a solution. In defense of Yahoo's CEO, one can state that shareholders were served by the sale and that is all that matters. Is it though?