Thousands of workers jobs cut as former boss walks away with $62M
theguardian.com
theguardian.com
How this is relevant in connection to the loss of jobs due to production interruptions is not at all clear. My impressions is that it's only made as clickbait in the hope that the reader would believe that he got it as severance or bonus payment.
One thing that can be done is make a person personally responsible as executive, but everything has a downside.
Yes, that's how the overlapping capitalist and executive classes take care of themselves, no matter what outcomes they produce, while assuring that labor pays a heavy price whenever something for which capital/executives are responsible goes wrong.
That's rather the point.
CEO was overpaid for failing (so much so Boeing had to fish for a $10B credit line), take back some of the comp and distribute it as additional severance to workers impacted by said executive failure.
It's the optics that are bad. Boeing CEO creates a culture where the 737MAX was designed and delivered, and failed.
This kind of thing, as an investor, is utterly maddening (ex-investor, I am glad I don't have to meet these people anymore). Pay for performance is no issue, the issue is that there is no performance. If you want the big job, you take the big risks...this is capitalism without failure (what is most maddening is that these people often see themselves as arch-capitalists...they are not, they are socialists milking the principal-agent problem to death).
Most CEOs are vastly overpaid. For scale, I would guess that the number of truly effective CEOs since WW2 is under 100 (I have only came across a handful). Today's CEOs are not type-A, successful geniuses...the majority will fail (the return on the average listed stock is negative), they will fail for basic/preventable reasons. As a public investor, your hope is that you just have a CEO who is dumb/ineffective...the ones who are smart are usually devious too and will do real damage.
I have no idea where we go from here but it is important to recognise that this isn't capitalism and this isn't sustainable. Public company boards are a big problem (again, nothing at risk) but there is also a deep incompetence...sometimes this is just not understanding what a company is there for (i.e. can be fixed by training), sometimes this is more about failures of personality/morality (i.e. we are actively picking bad people).
But yeah, this is a big issue: workers hate it, shareholders hate it, and nothing we have done so far has solved this (unsurprisingly, all the executive pay and linking to company performance is utter shit...I see this backfire more than it works i.e. a no-nothing director who was CEO somewhere else and ran the company into the ground sets targets which are either the wrong variable, too hard, or too easy...it never works). The risk from overpaying for a CEO is far larger than the risk from underpaying one (in fact, overpaying suggests that you have no idea what these people are actually worth and don't know what you are doing). It is totally reasonable to look at someone getting paid $60m (regardless of the circumstance) for failure, and going..."this doesn't make sense". If you get paid this much, you take the big risk. There has to be responsibility.
It makes one wonder if the workers should unionize. I do understand multiple companies (Boeing and several suppliers) are mentioned here, so maybe some of them have some kind of union. But the story is a microcosm of our times. A CEO who seems complicit in an episode that killed many and lost the company $13B gets paid enough to relax in luxury forever while the regular people who had nothing to do with the problem or actively fought against it suffer.
To me, the fact that the CEOs contract was agreed upon in advance does not suddenly make this situation fine. Perhaps we need to reformulate massive companies like this as worker owned cooperatives. Certainly in my mind we need to end the huge unequal privilege that executives have, however that should work out.
A golden parachute is a payment to get someone or of the company. It's a way for a company to part with someone without drama, lawsuits, etcetera. And sure, it could also be corruption.
It is not accumulated pensions over 35 years. Obviously. In a "black is not white" kind of way.
I have no particular knowledge of this dude. Maybe he was awful. Maybe he did as well as anyone could have in the circumstances. More likely, somewhere in the middle.
But his pension from more than there decades ago is not a golden parachute, and nobody would ever sign a contract with a three decade claw-back. This guy's total compensation does not sound terribly high by the standards of CEOs of this size organization.
not sure why this same scrutiny does not apply to pro athletes or actors/recording artists.
A good answer would address whether society should tolerate such agreements (corporations get special privileges under the law, so the question of whether they are making good use of those privileges is always on the table) and explore the dynamics that lead large corporations to extend huge salaries to a relatively small pool of people, even though there's lots of evidence that they aren't particularly capable of predicting the value a given individual will deliver.
They can drive a company into the ground and still walk away all the richer. Any time the company does something well the CEO gets all the credit while all the bad things are shrugged off.
Responsibility means consequences both good and bad.
Muilenburg started as CEO in 2015 and ended in 2019. So that's a 4-year pay gap - seems like a lot now, right? It does - but then I look and see that the performance of Boeing was up 150%, earning $100,000,000,000 ($100 Billion) since he took over - which is $70 Billion over the average S&P gain would've been.
So, let's round-up $62.2m to $70m and use the $70B figure - He earned a 0.1% return of the stock value gain. (Almost half that if taking the other figures).
No idea what the actual contract was - but that seems entirely reasonable to me. Not to mention it was awarded in stock, so the value stays in the company anyhow; especially when I'm sure there's some sort of wait period or other limits on selling the shares.
1) in your math you are assuming he took no money off the table in the 4 years before this point; that is just plain not true, he go bonuses every other year before 2019
2) I believe that profits/growth on a whole ate a trailing indicator, so his actual impact will be seen over the next couple of years; and if you look at 2019 as the first time in 22 years that the company posted a loss...
Boeing is heading towards a government bail out very rapidly.
If this situation comes into reality and the government or another institution does not bail Boeing out, what kind of impact would we expect to see on the aerospace industry and community?
This is why people put up with the high cost of living cities.
This is like being a software engineer and living somewhere outside the BA.
We've been on this neoliberal track for the past 40-50 years and it's consistently been to the benefit of the bosses at the top and none of the workers below.
I'd love to see more coops, more unions, heck, even nationalizing some companies (like Boeing in particular) and putting different objectives in place than purely capital gain.
Unions aren't a silver bullet. Some unions are bad. Coops aren't a silver bullet, and some coops are bad. But we're clearly much too far in the neoliberal capitalist sphere now.