One of my pet peeves is the frequent occurrence of paying offensive amounts of money to outgoing CEO’s at the expense of shareholders and prices paid by their customers. (Overpaid CEO’s & Tort Reform 1/26/07) Now we have another example here in Seattle which I’ve written about before – Another Golden Parachute for a CEO 1/3/07. Fabian Mansson was recruited by Eddie Bauer’s parent company, Spiegel Group in 2002 to save Eddie Bauer from financial distress. A year later Spiegel filed for bankruptcy and under Mansson’s leadership Eddie Bauer continued to worsen financially.
Paid almost a million dollars a year, under his management the company is in financial chaos, but he is scheduled to walk away with a $10 million dollar golden parachute even though the company under his "leadership" lost $275 million just this year and has gone down in value by one third in that year. Shareholders have experienced a 66% loss of value of their stock in the company since June of 2005. Not only that, this kind of insane rewarding of failure has become commonplace. For example, Pfizer Inc CEO Henry McKinnell was ousted, but is scheduled to be paid $200 million as a golden parachute while Helett-Packard Companies CEO Carly Fiorina, also fired, will be paid $21 million dollars. In the meantime, store employees fight for a decent wage and the shareholders end up paying the freight. There’s something very wrong with this, but big business is given a free hand under this administration.