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Comment by bgirard | Hacker News Reader

It depends what kind of candidate the exec is. Personally I don't enjoy working for places that are known for not firing low performers. I'd rather work somewhere that has higher stakes and higher rewards.

That kind of mentality is more likely to attract execs looking for a cushy high paying job with little to risk.

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It's not only firing, it's also taking back money already paid. Imagine the company had particularly good year, you get $LOTS_OF_MONEY, you spend it on $LUXURIES, and then next year something goes wrong, and the board decides it's your fault, and suddenly you owe $LOTS_OF_MONEY back. And you've already spent it, or invested it in some illiquid asset. Maybe very uncomfortable situation, much worse than plain firing. People aren't used to take that level of risk, so many may be reluctant, especially if other options are around.

I was imaging something like unvested equity. Yes that's a lot more aggressive. Contracts often require employees to pay some of the back signing bonuses and relocation fees if they leave within a year. I've heard rumors that it's not commonly enforced but contractually it's a possibility. But in theory there is precedent of that for employees where paying back a 100k signing bonuses and relocation expenses is a big risk and you still senior software engineers relocating to the bay area under those terms.

We're talking about severance pay that they were paid in the course of being fired. It's not clear to me that it should have been paid in the first place.

Well, if that's just severance that may be simpler case. But in general clawback clauses may extend years behind. OTOH, Wikipedia says[1]:

The prevalence of clawback provisions among Fortune 100 companies increased from lower than 3% prior to 2005 to 82% in 2010.

If everybody (or nearly everybody) starts doing so, then the competitive disadvantage of having such clauses is reduced, since it may still be better to have risky CEO job in F100 company than not having one.

[1] https://en.wikipedia.org/wiki/Clawback

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