To piggyback on Roxy’s topic for her presentation last week on the absorbent compensations of CEO’s, I found an interesting article that did focus on the immense salaries, but more on those CEO’s that were not deserving of multi-million dollar contracts. While I do agree that for the most part, CEO pay is somewhat unjustifiable, I do think a large salary for a person in such a visible role who carries huge responsibilities does deserve to be compensated greatly. However, my issue with the salary’s of CEO’s has more to do with those CEO’s that perform poorly and as a result the company and shareholders falter.
In an article posted today on Forbes.com, several CEO’s are highlighted as the top paid CEO’s that perform the worst. Among them, Gary Forsee the CEO of Sprint, basically negotiated a fail proof compensation package that would leave him with millions whether he helped or hurt the company. The only notable action he did with Sprint was led the catastrophic merge of Nextel which dropped the stock price from $25.00 to $7.40. When he was finally asked to leave, he left well taken care of; Sprint gave him $40 million over the course of 2 years which included his salary, bonuses, stock options, and a pension for life. How is it possible for a person to get paid more than the average person when not only are they not even working, but their performance was horrific?
I’m going to have to push some blame on the hiring practices of these huge corporations that allow for this type of thing to happen. First off, for the most part, I can’t imagine this highest paid “worst CEO’s” have a background of extraordinary performance that validates them being capable to run these massive organizations let alone justifies them having this much negotiation power. Just like the average employee, CEO’s need to be held accountability for goals and the growth of the business – after all, that’s why they get paid the big bucks, right?
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