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> They receive high salaries in anticipation of their doing a good job, and if they don't they're removed. When they get removed, they often receive golden par
by FartyMcFarter 6y ago
> They receive high salaries in anticipation of their doing a good job, and if they don't they're removed.
When they get removed, they often receive golden parachutes even if they seriously effed up the company.
This can't be explained by return on equity. I guess it can be explained by bargaining power or cronyism, or perhaps other things I'm not thinking of.
- jmalicki 6y agoI won't claim the system isn't corrupt at all... but if you were taking a job where the expectations were ridiculously high and there was a pretty chance you'd get fired possibly for things outside of your control, and in a way that would end your career because your failure would be so public if you screwed up, wouldn't you demand the golden parachute as insurance? True often the golden parachutes are way too high compared to realistic performance bonuses. But if you think of that as insurance - the board and the CEO both know this is risky, so they negotiate a fixed golden parachute just in case it doesn't work out - otherwise why would someone who wouldn't get fired take the job, since they wouldn't want to risk the downside?