Why Is This Legal? $80 Million to CEO For Leaving
|April 10, 2014||Posted by Staff under Inequality / Concentration|
This 2014 excerpt of the New York Times, Mar 20, is by David Gelles.
Robert D. Marcus became chief executive of Time Warner Cable at the start of the year. Less than two months later, he agreed to sell the company to its largest rival, Comcast, for $45 billion.
For that, he will receive nearly $80 million, once the FCC approves. That’s more than $1 million a day for six weeks.
The extraordinarily large exit package is another instance of corporate America rewarding executives with outsize sums for minimal amounts of work — and an example of income inequality in America.
Marcus’ payout will not be close to the largest golden parachutes of all time.
- John Welch got from General Electric in 2001 more than $417 million.
- Lee R. Raymond got from Exxon Mobil in 2005 $321 million.
- William McGuire got from UnitedHealth Group in 2006 $286 million.
- Dozens of executives got more than $150 million.
But Welch, Raymond, and McGuire had been at their companies for years. Marcus, 48, for such a short period.
Executives can receive golden parachutes not only when they sell their companies, but also when they retire, and even when they are fired.
Time Warner Cable shareholders can express their displeasure with the package when they vote on the deal. But it will not change a thing. Such votes are nonbinding.
Mr. Marcus will not be the only Time Warner Cable executive in line for a big payday. Arthur T. Minson Jr., the chief financial officer, will receive severance pay of $27 million. Michael L. LaJoie, the chief technology officer, will receive $16.3 million. And Philip G. Meeks, the chief operating officer, will take home $11.7 million.
Ed. Notes: Why is this not theft? Management did not earn those millions that they take from the company. The money belongs to shareholders.
Government needs to break from Big Business and side with the public and write laws that would lead to executives getting arrested and serving time when they steal via paying themselves from their companies.
Also, such fat payouts prove that government, were it truly in the people’s corner, could negotiate far higher “rent” payments for letting tele-comms use the airwaves or enjoy other monopolies in various regions. Government could use the revenue from granting such privileges to pay dividends to citizens, since corporations are not paying fair dividends to shareholders.