In a fresh stab at curbing executive-severance benefits, some companies have been under fire for “golden coffins” that pay the heirs of executives who die on the job unearned salary, bonuses and other compensation.
But, over the past two decades, actual payments made by public companies have been scant, helping to support the argument by corporate boards that golden coffin payments are rare and a cheap way to retain and lure CEOs.
There are two fallacies here in this golden coffin thingee.
One is the myth of the CEO, the notion that somehow choosing a CEO is the make or break decision for a company. Sure, there have been a few cases where one person at the top has managed to lead a company out of danger to new fortunes–Jack Welch at GE comes to mind–or the wrong person at the top has led a company to destruction, but the unusual experiences of one or two companies is really not a good basis for management policy across the economy.
The other is that money is not just an important, but the only means for motivating performance. That just ain’t how people work. It is certainly important, but, after you’ve accummulated several gazillion bucks, what’s a few million more? except perhaps as a way of keeping score versus other CEOs (and that’s motivation by competitiveness, not by money). Frankly, persons who are motivated solely by money tend to be fairly untrustworthy. because the desire for money overrides other values.
credit default swaps that AIG any Citigroup business Ameriquest would Bear Sterns do Lehman anything Standard and Poors dicey Moody’s just Zero-Option ARMs for money. Certainly not.