The Golden Parachute Option for CEO's

1806 Words8 Pages
Imagine being in a world where people are paid in cash bonuses, stock options, or generous severance pay when fired from their job due to a company merger, are asked to leave, or choose to retire. This happens to be a reality for many CEO’s and top executives of companies. We live in an economy where mergers and take over’s have become common, and to allow this option for the highest paid employees of a company is arguably unfair. While researching golden parachutes, I formed questions due to the circumstances surrounding this executive option. For example, why should CEO’s, who live very comfortably, be given a compensation package for losing their position due to a company merger or retirement when employee and shareholder’s futures are…show more content…
Once executives were getting these highly substantial payments, shareholders quickly questioned executives for their integrity and motive due to this high increase in payment amounts. There have been many debated reasons in support of and against golden parachutes on account of the increase in payment amounts and how the terms of their severance package were written out.
It interests me how easy someone can be opposed to golden parachutes from a middle class citizen’s view, where we all want to be paid the same dollar figures as top executives. It’s strongly argued golden parachutes give the feeling that CEO’s and top executives are solely looking out for themselves, not considering how investors and employees will be impacted by mergers. As I stated in my opening paragraph, “Why should CEO’s be given a compensation package for losing their job due to a company merger or retirement when employee and shareholder’s futures are at stake?” Andrew Ross Sorkin supported this notion in his article Executive Pay: A Special Report; Those Sweet Trips to the Merger Mall in which he stated, “Mergers and acquisitions can be get-rich-quick paths for top corporate managers, providing a personal incentive to get the deal done, no matter what happens to shareholders. And they are no longer just for chief executives who sell their companies
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