Big Bucks for a Job Poorly Done

http://www.newsweek.com/2010/08/16/big-bucks-for-a-job-poorly-done.html


CEOs are dropping like flies this year. Just this month, the CEOs of GM, Sara Lee and Hewlett-Packard announced their resignations, though each did so for different reasons.

In the case of HP, Mark Hurd was forced to resign after allegedly having an affair with a contractor and subsequently fabricating expense reports to cover up money that had gone to the woman. However, despite these allegations, Hurd, like most CEOs at major U.S. companies, will likely end up with a very generous severance package from the company. Early estimates say he may receive anywhere between $12 million and $40 million.

It’s no surprise Americans get frustrated when hearing about CEOs earning more money in an hour than most Americans earn in a year. It’s one thing when a CEO gets paid millions of dollars for a job well done, but the executives on this list made off with incredibly generous severance and retirement packages, even as they failed their companies.

--By Seth Fiegerman for MainStreet.com

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There is a slide show of 7 examples:

1. Tony Hayward, BP
While there’s no official word on how much he’ll get, estimates put it near $18 million.

2. Rick Wagoner, GM
When Wagoner left, the company was on the brink of financial ruin, and a month later, GM filed for bankruptcy. According to the Securities and Exchange Commission, GM will pay Wagoner $8.2 million for the first five years of his retirement and $74,030 each year on top of that for as long as he lives.

3. Ken Lewis, Bank of America
Lewis presided over the company as it entered into a financial crisis and needed a bailout with billions in taxpayer money. But when it came time to leave, the company rewarded him with $72 million in “stock and other compensation,” on top of $53 million in pension money.

4. Carly Fiorina, HP
Carly Fiorina, was forced to resign back in 2005 due to the company’s declining market value. But the company still paid her $21 million in severance and as much as $20 million on top of that in stock options.

5. Harry Stonecipher, Boeing
Harry Stonecipher was forced to step down in 2005 due to allegations that he’d had an affair with an executive at the company. Unlike some of the other CEOs on this list, Stonecipher was penalized somewhat for his actions, and had to forfeit $38 million in company stocks. Still, Boeing didn’t let him leave completely empty-handed. As part of his severance package, Stonecipher made off with $11 million in stocks plus an annual pension of $681,000 a year.

6. Hank McKinnell, Pfizer
Hank McKinnell was the CEO of Pfizer for five years, and the company’s stock value suffered throughout his tenure. Imagine how shareholders must have felt in 2006 when McKinnell was pushed out, only to end up with one of the largest severance packages in history. McKinnell received $122 million in retirement money, plus additional compensation worth another $78 million.

7. Martin Sullivan, AIG
Martin Sullivan took over as CEO in 2005 and served in this position until the middle of 2008 after AIG posted two consecutive quarters of record losses. AIG paid Sullivan a nice severance of $15 million, in addition to $28 million in additional compensation.

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