By James Kwak
The indefatigable Lucian Bebchuk has written another empirical paper (Dealbook summary), this time with Alma Cohen and Charles Wang, on the impact of golden parachutes (agreements that pay off CEOs generously in case of acquisition by another company) on shareholder value.
Tony Hayward is out as CEO of BP after the company's disastrous oil spill. He stands to walk away with a compensation package that includes about $1.5 million in salary, and a pension worth $17 million. That will seem like an unforgivable sum to many people. But as "golden parachutes" go, his deal is actually quite modest.
NEW YORK (Reuters) - Pay practices, such as excessive golden parachutes, golden coffins and multi-year employment agreements with generous severances, should be avoided, a report on compensation to be released on Monday said.
The Federal Deposit Insurance Corp. is preparing to settle with three former executives who ran Washington Mutual, the biggest bank failure in U.S. history, for the return of $64 million worth of golden parachutes, bonuses and retirement funds.
The French government intends to block Valeo chairman and chief executive, Henri Morin, from obtaining his 3.2 million euro golden parachute. The French state holds a 2.3 percent stake in Valeo via a strategic investment fund.