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For all the people who scream at this as unjust -- what do you propose instead? I know your knee-jerk is "pay him $0!" But seriously. If you were on their boa

For all the people who scream at this as unjust -- what do you propose instead? I know your knee-jerk is "pay him $0!" But seriously. If you were on their board. You disregard his employment contract? You don't honor contracts? You make a huge scene and have the CEO exit furiously? And, you do realize the CEO didn't actively facilitate the breech? I'm not defending him, but what would you really suggest?

deleted 9y ago
[deleted]
Canada 9y ago
I propose the CEOs payment is put on hold, behind all other creditors. Until all lawsuits are settled and all the creditors arising from them are paid in full he shouldn't see a dime of that money. In several years time, if anything remains of the company, he can collect.
semperdark 9y ago
People aren't mad that his contract is being honored, they're annoyed that there are no provisions for gross failure. As for actively facilitating the breach, almost no CEO ever does. One of his jobs is to solve problems indirectly before they show up by appointing the right people to react to them. Appointing his college buddy as the chief of InfoSec was a gross failure to do that.
- dogruck 9y ago
  Totally fair response. Do you think the board failed to minimize the total financial impact, and that shareholders will now vote to replace most of the board seats? Shareholders run the company. Are we mad at the CEO, or mad at the shareholders?
  - semperdark 9y ago
    It's hard to say what will happen, but the shareholders would be justified in replacing board members over this. Shareholders don't run public companies directly, I think the farthest that you can logically assign blame is with the board. Did the board fail to minimize total financial impact? In this case, yes. At the same time, adding a "failure" provision to the contract may have scared off good CEOs. I find it unlikely that this CEO has created more value than an overall worse CEO who would have avoided this, but it depends on the outcome of the lawsuits and PR fallout.
    - lowry 9y ago
      Isnt't it implied as part of any work contract? I am pretty sure it is the case everywhere in older Europe.
      - semperdark 9y ago
        I'm not a lawyer, so I can't say, but with numbers like that the former CEO could afford to have an entire law firm working on the case for him. I can't imagine that implications would go very far.
    - dogruck 9y ago
      I agree that the shareholders might be justified in assailing the board.
Aaargh20318 9y ago
> And, you do realize the CEO didn't actively facilitate the breech? As CEO he is responsible for his company. If a breech happens, it’s because he mismanaged it. They take home huge salaries, stock options and other forms of compensation, supposedly because their job carries so much responsibility, then he should also take responsibility when the shit hits the fan. Not only should he not get a cent, every single dollar that the company loses as a result of this should be recovered from him. Bankrupt the fucker and have him live the rest of his days in a box under a bridge. You cannot claim ridiculous amounts of money because of your responsible job and then not be held responsible.
- dogruck 9y ago
  I agree that he is responsible. But his contract doesn't read, "if any big bad thing happens, we pay you $0!" That would surely be a great contract, but they would have a tough time hiring a CEO. By analysis, every landlord should put a "if anything really bad happens at this property, you are fully responsible."
  - digitaltrees 9y ago
    Landlords often require renters insurance for this exact reason and definitely try to hold tenants liable for damage. Many states have laws to prevent landlords from doing exactly this.
    - dogruck 9y ago
      Right -- many states have laws to prevent landlords from writing such clauses.
  - dingo_bat 9y ago
    > By analysis, every landlord should put a "if you burn the fucking house down, you are fully responsible." FTFY.
  - Aaargh20318 9y ago
    > "if any big bad thing happens, we pay you $0!" No, it should read 'if big bad things happen, you pay us the damages'. The question is simple: Is the CEO (directly or indirectly) responsible for how the company operates ? If (s)he is, then it's fair (s)he gets a decent bonus when the company does well, but that would also mean they are responsible when everything goes south, and then they should pay for the damage. Otherwise they can basically take huge risks with the company in the hope they score a big bonus, and there will be no consequences when it goes tits up. You cannot only be responsible when things go well, that's not how responsibility works.
deleted 9y ago
[deleted]
digitaltrees 9y ago
Why is the employment contract structured so that the CEOs pay goes up with shareholder value but doesn’t go down when shareholder value is destroyed? It doesn’t have to be this way. Companies used to be structured as partnerships in most cases with the executives personally liable for harm to the company and caused by the company.
- dogruck 9y ago
  Because otherwise they couldn't hire a good CEO. Unless the shareholders and the board are making bad hiring decisions.
  - digitaltrees 9y ago
    Maybe companies should filter CEOs based on their own confidence in their performance. I wouldn’t hire a sales person that wanted a large salary or guaranteed bonus; that means they don’t believe they will perform and earn a larger bonus.
  - digitaltrees 9y ago
    We could also decide, as a society, that this is a problem; that the perverse incentives in place are harmful and change how companies are allowed to operate. For example, until the 90’s investment banks could only be general partnerships, meaning each banker was personally liable for the debt of the firm. What do you think that meant for how seriously they took underwriting risk? Similarly, law firms cannot sell stock and must only be owned by lawyers because society believes any other ownership structure would have a conflict of interest and harm clients.
    - dogruck 9y ago
      You're right that we could collectively define new laws and rules. But what would they be? Their are downsides to investment banks being private partnerships. On the other hand, I've talked with execs that wish the banks hadn't gone public. Yet they had strong incentives to go public.
  - 9y ago
criminalruck 9y ago
Haul the CEO in before a panel of senators like we did with Washington Mutual. Or, better yet, nationalize Equifax. He didn't actively facilitate the breach but he certainly precipitated it with neglect and terrible leadership. That's why he's stepping down to begin with. On that note, yeah, you are totally defending him. Passive aggressive-language like "for all those people scream at this as unjust" and "your knee-jerk", indicates you're (weirdly) assuming superiority over those who are unhappy about an obvious injustice. Or perhaps you don't view his crime as injustice at all: "make a huge scene and have the CEO exit furiously", yes that kind of drama would be totally unfitting for one of the most serious data leaks in history. Don't patronize us.
jedharris 9y ago
Have we seen his contract? There's likely a clause about gross misbehavior that would be grounds for termination. "You make a huge scene and have the CEO exit furiously?" That would probably be very popular and maybe increase the stock value.
323454 9y ago
Put him on trial for criminal negligence.

deleted 9y ago

[deleted]

Canada 9y ago

I propose the CEOs payment is put on hold, behind all other creditors. Until all lawsuits are settled and all the creditors arising from them are paid in full he shouldn't see a dime of that money. In several years time, if anything remains of the company, he can collect.

semperdark 9y ago

People aren't mad that his contract is being honored, they're annoyed that there are no provisions for gross failure. As for actively facilitating the breach, almost no CEO ever does. One of his jobs is to solve problems indirectly before they show up by appointing the right people to react to them. Appointing his college buddy as the chief of InfoSec was a gross failure to do that.

dogruck 9y ago
Totally fair response. Do you think the board failed to minimize the total financial impact, and that shareholders will now vote to replace most of the board seats? Shareholders run the company. Are we mad at the CEO, or mad at the shareholders?
- semperdark 9y ago
  It's hard to say what will happen, but the shareholders would be justified in replacing board members over this. Shareholders don't run public companies directly, I think the farthest that you can logically assign blame is with the board. Did the board fail to minimize total financial impact? In this case, yes. At the same time, adding a "failure" provision to the contract may have scared off good CEOs. I find it unlikely that this CEO has created more value than an overall worse CEO who would have avoided this, but it depends on the outcome of the lawsuits and PR fallout.
  - lowry 9y ago
    Isnt't it implied as part of any work contract? I am pretty sure it is the case everywhere in older Europe.
    - semperdark 9y ago
      I'm not a lawyer, so I can't say, but with numbers like that the former CEO could afford to have an entire law firm working on the case for him. I can't imagine that implications would go very far.
  - dogruck 9y ago
    I agree that the shareholders might be justified in assailing the board.

Aaargh20318 9y ago

> And, you do realize the CEO didn't actively facilitate the breech? As CEO he is responsible for his company. If a breech happens, it’s because he mismanaged it. They take home huge salaries, stock options and other forms of compensation, supposedly because their job carries so much responsibility, then he should also take responsibility when the shit hits the fan. Not only should he not get a cent, every single dollar that the company loses as a result of this should be recovered from him. Bankrupt the fucker and have him live the rest of his days in a box under a bridge. You cannot claim ridiculous amounts of money because of your responsible job and then not be held responsible.

dogruck 9y ago
I agree that he is responsible. But his contract doesn't read, "if any big bad thing happens, we pay you $0!" That would surely be a great contract, but they would have a tough time hiring a CEO. By analysis, every landlord should put a "if anything really bad happens at this property, you are fully responsible."
- digitaltrees 9y ago
  Landlords often require renters insurance for this exact reason and definitely try to hold tenants liable for damage. Many states have laws to prevent landlords from doing exactly this.
  - dogruck 9y ago
    Right -- many states have laws to prevent landlords from writing such clauses.
- dingo_bat 9y ago
  > By analysis, every landlord should put a "if you burn the fucking house down, you are fully responsible." FTFY.
- Aaargh20318 9y ago
  > "if any big bad thing happens, we pay you $0!" No, it should read 'if big bad things happen, you pay us the damages'. The question is simple: Is the CEO (directly or indirectly) responsible for how the company operates ? If (s)he is, then it's fair (s)he gets a decent bonus when the company does well, but that would also mean they are responsible when everything goes south, and then they should pay for the damage. Otherwise they can basically take huge risks with the company in the hope they score a big bonus, and there will be no consequences when it goes tits up. You cannot only be responsible when things go well, that's not how responsibility works.

deleted 9y ago

[deleted]

digitaltrees 9y ago

Why is the employment contract structured so that the CEOs pay goes up with shareholder value but doesn’t go down when shareholder value is destroyed? It doesn’t have to be this way. Companies used to be structured as partnerships in most cases with the executives personally liable for harm to the company and caused by the company.

dogruck 9y ago
Because otherwise they couldn't hire a good CEO. Unless the shareholders and the board are making bad hiring decisions.
- digitaltrees 9y ago
  Maybe companies should filter CEOs based on their own confidence in their performance. I wouldn’t hire a sales person that wanted a large salary or guaranteed bonus; that means they don’t believe they will perform and earn a larger bonus.
- digitaltrees 9y ago
  We could also decide, as a society, that this is a problem; that the perverse incentives in place are harmful and change how companies are allowed to operate. For example, until the 90’s investment banks could only be general partnerships, meaning each banker was personally liable for the debt of the firm. What do you think that meant for how seriously they took underwriting risk? Similarly, law firms cannot sell stock and must only be owned by lawyers because society believes any other ownership structure would have a conflict of interest and harm clients.
  - dogruck 9y ago
    You're right that we could collectively define new laws and rules. But what would they be? Their are downsides to investment banks being private partnerships. On the other hand, I've talked with execs that wish the banks hadn't gone public. Yet they had strong incentives to go public.
- 9y ago

criminalruck 9y ago

Haul the CEO in before a panel of senators like we did with Washington Mutual. Or, better yet, nationalize Equifax. He didn't actively facilitate the breach but he certainly precipitated it with neglect and terrible leadership. That's why he's stepping down to begin with. On that note, yeah, you are totally defending him. Passive aggressive-language like "for all those people scream at this as unjust" and "your knee-jerk", indicates you're (weirdly) assuming superiority over those who are unhappy about an obvious injustice. Or perhaps you don't view his crime as injustice at all: "make a huge scene and have the CEO exit furiously", yes that kind of drama would be totally unfitting for one of the most serious data leaks in history. Don't patronize us.

jedharris 9y ago

Have we seen his contract? There's likely a clause about gross misbehavior that would be grounds for termination. "You make a huge scene and have the CEO exit furiously?" That would probably be very popular and maybe increase the stock value.

323454 9y ago

Put him on trial for criminal negligence.