Click amount to donate direct to CounterPunch
  • $25
  • $50
  • $100
  • $500
  • $other
  • use PayPal
Please Support CounterPunch’s Annual Fund Drive
We don’t run corporate ads. We don’t shake our readers down for money every month or every quarter like some other sites out there. We only ask you once a year, but when we ask we mean it. So, please, help as much as you can. We provide our site for free to all, but the bandwidth we pay to do so doesn’t come cheap. All contributions are tax-deductible.
FacebookTwitterGoogle+RedditEmail

The Mystery of the Golden Parachutes

The concept of the “golden parachute”—where a big-time executive is given a generous bonus upon being relieved of his duties—is a peculiar one.  A company hires a renowned CEO whose reputation and resume not only precede him, but require that they pay him a huge, multi-million dollar salary.

And of course, along with that mega-salary come some very envious perks:  a limo to and from work, stock options, a generous vacation allotment, use of the company jet, membership in a swanky country club, and free piano lessons.

Why so rich a package?  Simple answer: Because this guy is thought to be worth every penny of it.  Simple answer:  Because he’s acknowledged to be a “rainmaker,” a man who’s demonstrated that he’s capable of taking over a company in distress and turning it into a profitable entity, and of taking over a profitable company and turning it into a gold mine.  In other words, this guy is a can’t-miss, managerial genius.

Which is why it’s so bizarre that this fellow would feel compelled to negotiate the terms of his own departure, once he’s fired for incompetence.  Isn’t that a bit pessimistic?  Even more bizarre is why management would agree to those terms.  Why would the same management team that agreed to pay this guy an exorbitant salary for leading the company forward agree to an exorbitant reward for his failing to do so?

A man comes in and tells you he’s the Messiah, he recites the long list of his accomplishments, his victories, his awards, his prizes, and informs you that, because he’s so damned talented, you’re going to have to pay him millions of dollars a year just to keep him.  And then, after you agree, he proceeds to tell you that he’s going to need an additional $10 million as a going-away present after he fails, and you fire him.

One would think that any self-confident, self-respecting executive would, as a matter of personal pride, treat this endeavor as a win-lose opportunity.  After all, the company is already compensating you very generously, expecting you to succeed.  And if you do succeed—if you do as expected—they’ll surely compensate you even more generously.

But if you fail in your job, if you fail to do the one thing that they hired you to do, why on earth would you expect to be rewarded for it?  Why would you expect to be rewarded for failing?  Is that the American way?  Why not just slink away with the millions of dollars you’ve already made, and write the whole thing off as an unfortunate mistake?

Golden parachutes remind me of pre-nuptial agreements.  A man and woman fall in love.  They are so much in love, they can’t bear being out of each other’s sight.  They can’t abide the thought of not living with each other for the rest of their natural lives.  That’s how much in love they are.  They decide to get married.

Then, after settling on the church, the guest list, the wedding dress, the cake, and where to go on their honeymoon, they sit down and discuss how to divvy up the money once they get divorced.  Call me old-fashioned, but that doesn’t sound romantic.  And call me frugal, but golden parachutes don’t sound kosher.

DAVID MACARAY, an LA playwright and author (“It’s Never Been Easy:  Essays on Modern Labor”), was a former union rep.   He is a contributor to Hopeless: Barack Obama and the Politics of Illusion, published by AK Press. Hopeless is also available in a Kindle edition. He can be reached at dmacaray@earthlink.net

COMING IN SEPTEMBER

A Special Memorial Issue of CounterPunch

Featuring recollections of Alexander Cockburn from Jeffrey St. Clair, Peter Linebaugh, Paul Craig Roberts, Noam Chomsky, Mike Whitney, Doug Peacock, Perry Anderson, Becky Grant, Dennis Kucinich, Michael Neumann, Susannah Hecht, P. Sainath, Ben Tripp, Alison Weir, James Ridgeway, JoAnn Wypijewski, John Strausbaugh, Pierre Sprey, Carolyn Cooke, Conn Hallinan, James Wolcott, Laura Flanders, Ken Silverstein, Tariq Ali and many others …

Subscribe to CounterPunch Today to Reserve Your Copy

More articles by:

David Macaray is a playwright and author. His newest book is How To Win Friends and Avoid Sacred Cows.  He can be reached at dmacaray@gmail.com

October 17, 2018
Patrick Cockburn
When Saudi Arabia’s Credibility is Damaged, So is America’s
John Steppling
Before the Law
Frank Stricker
Wages Rising? 
James McEnteer
Larry Summers Trips Out
Muhammad Othman
What You Can Do About the Saudi Atrocities in Yemen
Binoy Kampmark
Agents of Chaos: Trump, the Federal Reserve and Andrew Jackson
David N. Smith
George Orwell’s Message in a Bottle
Karen J. Greenberg
Justice Derailed: From Gitmo to Kavanaugh
John Feffer
Why is the Radical Right Still Winning?
Dan Corjescu
Green Tsunami in Bavaria?
Rohullah Naderi
Why Afghan Girls Are Out of School?
George Ochenski
You Have to Give Respect to Get Any, Mr. Trump
Cesar Chelala
Is China Winning the War for Africa?
Mel Gurtov
Getting Away with Murder
W. T. Whitney
Colombian Lawyer Diego Martinez Needs Solidarity Now
Dean Baker
Nothing to Brag About: Scott Walker’s Economic Record in Wisconsin:
October 16, 2018
Gregory Elich
Diplomatic Deadlock: Can U.S.-North Korea Diplomacy Survive Maximum Pressure?
Rob Seimetz
Talking About Death While In Decadence
Kent Paterson
Fifty Years of Mexican October
Robert Fantina
Trump, Iran and Sanctions
Greg Macdougall
Indigenous Suicide in Canada
Kenneth Surin
On Reading the Diaries of Tony Benn, Britain’s Greatest Labour Politician
Andrew Bacevich
Unsolicited Advice for an Undeclared Presidential Candidate: a Letter to Elizabeth Warren
Thomas Knapp
Facebook Meddles in the 2018 Midterm Elections
Muhammad Othman
Khashoggi and Demetracopoulos
Gerry Brown
Lies, Damn Lies & Statistics: How the US Weaponizes Them to Accuse  China of Debt Trap Diplomacy
Christian Ingo Lenz Dunker – Peter Lehman
The Brazilian Presidential Elections and “The Rules of The Game”
Robert Fisk
What a Forgotten Shipwreck in the Irish Sea Can Tell Us About Brexit
Martin Billheimer
Here Cochise Everywhere
David Swanson
Humanitarian Bombs
Dean Baker
The Federal Reserve is Not a Church
October 15, 2018
Rob Urie
Climate Crisis is Upon Us
Conn Hallinan
Syria’s Chessboard
Patrick Cockburn
The Saudi Atrocities in Yemen are a Worse Story Than the Disappearance of Jamal Khashoggi
Sheldon Richman
Trump’s Middle East Delusions Persist
Justin T. McPhee
Uberrima Fides? Witness K, East Timor and the Economy of Espionage
Tom Gill
Spain’s Left Turn?
Jeff Cohen
Few Democrats Offer Alternatives to War-Weary Voters
Dean Baker
Corporate Debt Scares
Gary Leupp
The Khashoggi Affair and and the Anti-Iran Axis
Russell Mokhiber
Sarah Chayes Calls on West Virginians to Write In No More Manchins
Clark T. Scott
Acclimated Behaviorisms
Kary Love
Evolution of Religion
Colin Todhunter
From GM Potatoes to Glyphosate: Regulatory Delinquency and Toxic Agriculture
Binoy Kampmark
Evacuating Nauru: Médecins Sans Frontières and Australia’s Refugee Dilemma
FacebookTwitterGoogle+RedditEmail