Check out this report highlighting some of the most lucrative CEO severance packages since 2000. Pretty insane if you ask me. This is obviously not typical, but now I'm curious about what typical severance packages are like for F500 CEOs. Moreover, what are they like for other executives? Anyone with any information?
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Wow, some of those numbers are insane. Gillette: $165 million over 5 years. What could possibly justify that sort of compensation? What kind of management talent are you bringing to a mature consumer products company with dominant market share to justify that level of comp? Relative to almost any large company, Gillette is incredibly easy to manage. Talk about bilking your shareholders.
According to that article, Gillette's CEO got his payday after he succesfully sold the company to P&G.
But I agree, some of those figures are pretty outrageous. I feel like Americans give too much credit (and pay) to c-level management when a company is doing well. A lot of factors go into the direction of a company, not just the strategy and leadership of c-level execs.
I might have to rethink finance and go into F500 if that is the case.
^yup. I'm hoping consulting sets me up well for some good industry exits so I have a shot at the C Suite.
MBP- out of curiousity how long have you been in consulting? Are you at m/b/b? Are you getting offers from clients yet?
I am a Mgr at F500, but I wish I went the consulting route first.
Why is that. because of the work? Or because you would be higher up the ladder had you lateraled from consulting?
Gilette was a great company and sold handsomely to P&G.
Nardelli still needs to be the worse by far, he did nothing at Home Depot basically was begged to leave and got paid stupid $$$. Followed by sucking at his next job too.
The funny thing is, Nardelli worked out terribly, because he was a terrible fit from a style perspective as well as an industry knowledge perspective, so when THD replaced him, they went with his deputy at GE...who actually ended up being Nardelli's opposite...successful and not a dick.
What does Gillette being a great company have to do with anything? Okay, it's a great company. Compensation should be based on contribution to the business. Gillette practically runs itself. There is virtually zero innovation in the products. All they have to do is maintain product quality, shelf space and brand and they can make a mint. There is no technology obsolesence risk, no threat of new entrants or substitute products, no foreign manufacturing risk, no pricing pressure risk -- basically very little to worry about. All you have to do as CEO is not fuck it up. There is NO WAY that someone in that kind of role can justify $165 million. I'm not saying they should pay him like a pauper, but his comp was way out of line. And don't say, he brokered a deal with P&G -- P&G had a massive erection to buy Gillette, not because some CEO developed an amazing exit strategy. Any consumer products company would want to own Gillette because they know it is still going to have dominant market share and excessively high margins 100 years from now -- it's a no brainer.
I agree that Nardelli was horrible though. It seems like people can reach a point where performance doesn't even matter anymore, where people become enamored with some "story of greatness" and continue to throw money at these clowns even though greatness never emerges. You've got Nardelli. You've got John Merriwether in the hedge fund world. I'm sure there are others (probably lots in sports).
It's called a golden parachute for a reason, to prevent hostile takeovers of the firm. Not the exact same thing as your typical severance package.
Actually that was me you were answering too in the other post. Sorry man didn't realize it was you. But thanks for the replies. Very informative.
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