Monday, July 26, 2010

A Call for the End of the Golden Parachute Age

The whole concept of the "golden parachute" has bothered me ever since the phrase was coined in the 1970's. It is hard for me to understand the action of giving a company executive a financial incentive to leave after he/she has caused problems due to poor decisions in the running of a company. After all, the reason that America CEOs "earn" 400 times the salary of the average worker in a company is their expertise. If their "expertise" is faulty, the logical action is to fire them, not to reward them for their mistakes. How bankers and stock analysts received bonuses after their 2008 efforts is difficult for anyone to comprehend.

Combine this offering of a golden parachute practice with that fact that the present CEO of BP is about to leave. This is the man who left the Gulf oil crises scene to attend a yacht race across the Atlantic before the environmental crisis was resolved. What would happen to a firefighter if he left the scene of a fire emergency to attend a baseball game? He would be fired and would never even be allowed to interview for another job in a related profession. What is the future fate of BP's present CEO, Tony Hayward?

""NEWSMAKER-BP's diplomat Dudley in line to become CEO
4:05am EDT

BP expected to install Bob Dudley as CEO soon

LONODN, July 26 (Reuters) - BP Plc (BP.L) (BP.N) Chief Executive Tony Hayward is to be nominated for a board position at its Russian venture TNK-BP (TNBPI.RTS) when he steps down from his current role, Sky News reported, citing sources.

TNK-BP declined to comment on the Sky News report on Monday when contacted by Reuters."

What it comes down to in my own mind are two questions:

1.Is Tony Hayward being given a golden parachute for leaving BP without a fuss?

2.Who in his right mind would sponsor Hayward for another position of
responsibility, much less hire him for one?


It is time for responsible decision-making and ethical business practices. This statement, naive on my part, brings to mind the lyrics to the song that goes,"To dream the impossible dream....."

Kerry

Two hours after first posting my thoughts:

My worst fear about the continuity of the "golden parachute" has been confirmed. Damn! BTW 6 million British pounds= $7,500,000! Not bad for being a loser.

BP boss Hayward to get immediate £600000 pension
BBC News - ‎1 hour ago‎
BP chief executive Tony Hayward is receive an immediate £600000-a-year pension when he leaves the firm in October, the BBC has learned
.

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