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For CEOs, failure has its rewards
A Times Editorial
Published January 5, 2007
Sometimes, nothing succeeds like failure. Just ask Robert Nardelli. During the six years Nardelli was Home Depot's CEO, the stock price went nowhere, shareholders revolted at his autocratic rule and the company's shiny image was tarnished. Nardelli's punishment: When he was forced out on Wednesday, he walked away with a severance package worth $210-million. At the company's annual meeting, Nardelli wouldn't let shareholders ask questions about his pay. Now we know why. His is one of the most expensive golden parachutes on record, and sets a dubious mark for other overcompensated corporate executives to shoot for in 2007. Nardelli look-alikes from 2006 include: William McGuire. UnitedHealthcare CEO grew the company as well as the value of his own stock options, which were backdated to his advantage. When he jumped ship, those options were worth more than $1-billion. Compensation: $5-million a year for life and a $6.5-million lump sum payment. UnitedHealthcare's motto: "It just makes sense." Henry McKinnell. Run off as Pfizer CEO before he could retire, ironically because investors were angry over the richness of his retirement package. Compensation: at least $200-million. Investor rallying cry: "Give it back, Hank!" He didn't. Bruce Karatz. KB Home chief executive was well paid, earning an average $77-million over the past three years, but did even better by getting fired in a stock options scandal. Compensation: $175-million. Was Karatz worth it? "A trained monkey could have run a publicly traded home builder over the past three years and done pretty well," said Ed Durkin of the United Brotherhood of Carpenters. Philip Purcell. Morgan Stanley CEO got the boot while under attack from dissident shareholders and disgruntled employees. Compensation: $113-million. Ended his resignation letter: "Let's get back to work" - something he will never have to do again. Cashing in Robert Nardelli Home Depot $210-million William McGuire UnitedHealthcare $5-million a year for life and a $6.5-million lump sum Henry McKinnell Pfizer At least $200-million Bruce Karatz KB Home $175-million Philip Purcell Morgan Stanley $113-million
[Last modified January 4, 2007, 21:34:47]
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by Robert
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01/05/07 12:56 PM
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Nardelli was certainly overpaid as most CEO's are but he was no failure. Sales were $46 billion per year when he took over and $81.5 in 2005. Earnings per share were more than 100% greater and profits in 2005 were $5.8 billion.
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by Richard
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01/05/07 09:29 AM
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When you pay a million dollars a year why do they need a bonus. All bonuses should be taxed at 50% because they are a gift from the rotten directors who do the same for each other.You scratch my back and I will scratch yours. Vote no for directors.
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