Why we're in this mess or the end of capitalism

[fabsroman]

I'll side with both of you on this one. I'll side with Classic in that I think the Board of Directors are out of their mind in giving such great severance packages to these execs. However, the reason such great severance packages are needed is because they draft up terrible employment contracts with these execs. Classic, you are probably what is considered an at-will employee. That means, an employer can fire you on any given day for any reason whatsoever, except a protected right (e.g., religion, sex, sexial orientation, nationality), and you can quit on any given day for absolutely no reason. Now, when there is an employment agreement in place, the employee usually needs a good reason to quit to get out of the agreement, and the employer needs a good reason to fire the employee (i.e., for cause). Some severance packages are used to get rid of execs that are performing badly. Personally, I think this has been a poor negotiating spot for most companies. They should make a decrease in stock price a cause for terminating employment, and then not have to use a severance package. I know of some employees that get pretty good severance packages when their employment is terminated before the end of an employment contract.

Rattus,

I think the Board of Directors are completely out of their minds to give execs the level of compensation that they do. No company exec should be earning that kind of money, especially when a company stock is tanking. I think the same way about athletes. They should all be given a one year contract based upon how well the team does as a whole. One clear example I have is an E-Trade CEO that made 80 million one year around 2001/2002 when E-Trade's stock had taken a beating. The Board ended up firing him, but they couldn't get any of that 80 million back. Wish I could get 80 million for completely screwing up. The good thing is that the stockholders elect the Board, so they are somewhat to blame for it. However, the small guy like me just goes along with what everybody else picks. I hardly have time to keep track of the political issues during this election. So, I have absolutely no time to research who is on the Board of companies I own stock in, and therefore I am an uninformed voter when it comes to that stuff.