Paying for failure (executive remuneration)

Article Type: Abstracts From: Human Resource Management International Digest, Volume 16, Issue 7

Maiello M. and , Randall D.K. Forbes (USA), 19 May 2008, Vol. 181 No. 10, Start page: 114, No. of pages: 4

Purpose – draws attention to the generous remuneration packages being given to chief executives regardless of whether the succeed of fail in the job. Design/methodology/approach – describes how executives are being given generous remuneration packages regardless of whether they improve corporate performance, or not; provides the example of the lucrative pay package that Gary Forsee negotiated with Sprint when he took over as chief executive officer. Presents an annual performance-versus-pay survey (weights shareholder returns against executive pay over six years); puts forward how the survey shows that a large number of executives received large sums for mediocre work. Identifies some of the ways that corporate boards have devised for rewarding chiefs;features the golden handshake, “cherry-picked peers”, “consultant collusion”, “changing the rules”, “toothless claw backs”,“perks”, “buyout bonanza”, “gross gross-ups”and “golden kiss-off”; profiles some of the people who have been the lucky recipients of these techniques. Originality/value – identifies some of those that have benefited from the current hike in chief executive pay. ISSN:0015-6914 Reference: 37AM432

Keywords: Chief executives, Remuneration, Performance measurement, Perks