Golden Parachutes of the past year
Whether they leave in shame or glory, top executives are retiring in more splendor than ever. Some shareholders are crying foul
By Moira Herbst
The era of comfortable, defined-benefit pensions may be coming to an end for many workers in the U. S. economy, but executives of major corporations will still be spending their golden years on the finest golf courses, yachts, and tropical islands. In fact, every year outgoing leaders' golden parachutes get a bit more gilded, and 2006 saw the trend continue. Some executives sail off into a sunset of hundreds of millions, basking in pride at having boosted a company's stock price and enhanced its bottom line—even amid cries that mass layoffs or high prices helped fatten profits. Less fortunate executives may be finishing their tenure amid stock-options scandals or the shame of failed vision, but fine parting gifts can buy them any therapies they'll need to overcome the stress.
But with new SEC disclosure rules on severance going into effect in 2007, could this year mark the last hurrah for such platinum packages? Groundswells of shareholder angst about deals such as Home Depot’s $210 million package for departing CEO Bob Nardelli could cause some tarnish down the road, but for now ex-executives continue to bask in the glow of golden parachutes.