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With outrageous and undeserved pay packages gaining unprecedented attention at shareholder meetings this year, some activist investors are taking on one of the most egregious perks of the executive suite: "golden coffin" payments made to the estates of executives who die.My favorite example is Nabors Industries (NYSE: NBR) which will have to pay the estate of 78-year old chairman an astounding $263 million if he kicks the bucket.
But today's Wall Street Journal reports (subscription required) that some activist investors and pension funds are taking on these death benefits this proxy season, with a pretty good argument: Paying executives large bonuses for dying is the polar opposite of pay-for-performance -- although a crass person might argue that General Motors (NYSE: GM) would be in much better shape had it paid CEO Richard Wagoner a couple hundred million to take a dirt nap a few years ago.
While it's great that institutional investors are finally starting to go after these golden coffins, it's completely appalling that they didn't take on these directors sooner. The tanking stock market has brought egregious pay practices into the public eye but the idea of paying bonuses to executives who die is just as ridiculous in a bull market as it is in a bear market.
Corporate directors are predictably defending golden coffins as an important part of attracting talent, but it seems like most would be easier to lure in with money they can spend while they're on this planet.
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Reader Comments (Page 1 of 1)
3-09-2009 @ 4:35PM
Bharrison said...
". . . to pay the estate of 78-year old chairman an astounding $263 million if he kicks the bucket" rather epitomizes the vulgarity and absurdity of CEO compensations, does it not?
If sotckholder EVERYWHERE do nt rise up against this type of rip off and ridiculous CEO "compensations", then they deserve being robbed of their investments.
Any Board that would approve this should also be summarialy dispatched by the stock holders. Heck, it should be considered to be embezzement and corruption.
It is past time for this eara of "Robber CEOs" to be dispatched, to be indicted and prosecuted; and the ill gotten "compensations" returned to the corporations. Thisis all so totally insane. The "talent" that has been "boutght" with all of this, is the "talent" who has orchestrated our current economic debacles and collapse.
Where is there any "common sense" in any of this???