Firing America’s Top CEO’s: How Much it Cost?
The News about the firing of the Nation's Top CEOs.
Published on: Mar 4, 2016
Transcripts - Firing America’s Top CEO’s: How Much it Cost?
Firing America’s Top CEO’s: How Much it Cost?Boston Massachusetts - Don’t you know that failure has price? Currently there are 14 millionunemployed Americans and an estimated of 9% rate in unemployment had been recorded since April2009. But you will be surprised to know that CEO of huge companies is continuously to rake in multi-million dollars even though the companies they managed delivered a disappointing performance?Investors in huge companies might ache to dismiss CEO but firing a CEO is an expensive choice. This makes me wonder why Johnson & Johnson did not do this despite of string of productrecalls including the famous Depuy hip recall class action or asr hip recall due to recalled hipreplacement. DePuy Orthopaedics, is a subsidiary of Johnson & Johnson. Examples of these costly CEO firings are as follow: Hewlett-Packard, Yahoo!, Burger King andBank of New York Mellon. The executives of the mentioned huge companies were asked to resign thisyear and cost the shareholders a whopping $60 million. Leo Apotheker of Hewlett-Packard walked away$13.2 million richer. A study conducted by GMI, more than a quarter included in the S&P 500 had declining sales lastyear. The studies further showed that the executives of the struggling companies are entitled to receiveseverance payments worth $2.6 billion and an average of $22 million in the event they are fired. CVS’s CEO, Larry Merlo is in good hands if he’s ever fired as he is qualified for $170 millionseverance package. The same holds true for Ralph Lauren Corporation founder Ralph Lauren as he isentitled to $148 million severance payout. Reputable and huge companies like Verizon, LockheedMartin, Comcast and CVS whom all are reported with falling net incomes, but despite of the decline,shareholders of the said companies are obliged to pay almost half a billion dollars in severance packagesif they decide to fire these companies’ CEOs. The United States at the moment is in the midst of financial crisis. US legislators are planning topass a bill that regulates the huge payments departing CEO receives. The bill specifies to cash-onlypayments instead of stock-based compensation. Texas Democratic representative Lloyd Doggett, a senior member of the House Ways and MeansCommittee openly detested the seemingly overpayments that departing executives receives by sayingthat it is indeed outrageous that in order to get rid of a bad management can be possibly done by buying