Nov. 1, 2011 – The practice of rewarding chief executives with wealth has been around since the 1970’s, when corporations would create what became known as “golden parachutes.” These and other tactics, called poison pills, were meant to discourage hostile corporate takeovers.
“From the beginning, big parachutes have stoked some public anger,” writes Scott Thurm in the Wall Street Journal. analyzed company documents and SEC filings regarding pending sales of the companies in question, according to reporter. He says “the clauses are now a common part of executive contracts.”
Recent payments to failed executives include “at least $13 million” Hewlett-Packard awarded Leo Apotheker when they fired him for doing a poor job. In a well-publicized move this September, Yahoo Inc. paid Carol Bartz $10 when they kicked her out.