CEOs as a rule have to really trash the place before getting the sack. Replacing them before the damage is done requires a board to acknowledge it failed in its most important job, finding the right person to lead the business.
There has been no popular outrage over Nardelli's $210 million kiss-off. Rep. Barney Frank, incoming chairman of the House Financial Services Committee, recognizes the absurdity of it. "Mr. Nardelli's contribution to raising Home Depot's stock value consists of quitting and receiving hundreds of millions of dollars to do so." But in the land of Powerball payoffs, such strokes of good fortune as Nardelli's, even at others' expense, are no match for the state of Britney Spears' undergarments in capturing the public imagination. That disasters like Enron and WorldCom spring from delusional leadership borne of greed, that they demoralize the rank and file and undermine America's competitiveness. This appears to be of little concern today, a century after the Robber Barons were properly demonized.
And even they were playing with their own money, not that of pensioners. More
But it's not only pensioners who pay the price when boards make wrong decisions. Workers at these companies face wage cuts, layoffs and job insecurity, all to pay for outrageous salaries and severance packages for CEOs. These workers are no longer in a position to buy cars, homes and appliances. This hurts the economy as a whole and we all feel the pinch.
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