4 ms·
Not to disrupt the hate, but let me propose an alternative scenario: * The board approached Elop to take on a risky position: a failing company losing marketsh
by GrinningFool 13y ago
Not to disrupt the hate, but let me propose an alternative scenario:
* The board approached Elop to take on a risky position: a failing company losing marketshare.
* Elop says, "Well - I'm willing to give it a shot, but this is pretty bad. I need something in the contract that will allow me to actually make some money in the event that all else fails, and sale is the only option."
The CEO in this kind of structure does not unilaterally make major business decisions. He is advised by the board - in fact he serves at the whim of the board - and they generally can stop anything they don't agree with.
Now if we had a scenario where every board member had asimilar clause, then the idea that he deliberately drove the company into the ground would have more merit. But to me it just seems like a clause that any reasonable person would want before taking the helm of a sinking ship.
- auctiontheory 13y ago(1) The board should not give an incoming CEO a $25 million dollar incentive to destroy and sell the company. (2) A candidate with so little confidence in the company (as you describe) probably should not be hired for the job.
- rhizome 13y agoElop says, "Well - I'm willing to give it a shot, but this is pretty bad. I need something in the contract that will allow me to actually make some money in the event that all else fails, and sale is the only option." If he's being hired to fix the company and has a clause that guarantees compensation if he fails, that would seem to create a perverse incentive. Why does he get paid extra for doing a bad job?
- GrinningFool 13y agoDo you know what his incentives were for turning it around? Might have been considerably higher. (That's only somewhat a rhetorical question - I believe it's a matter of record with the SEC if anyone cares to look it up. )