Comment by natep | Hacker News Reader

Comment by natep | Hacker News Reader

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He said "risky or harmful to the corporation in the long run" so I don't think he believes there is a causality connection there.

No longer trying to speak for the GP here, but I think that for many of the people that hate 'golden parachutes,' it violates their sense of justice. The entire company faces negative consequences when a high-risk maneuver fails, except for the CEO that decided on the maneuver in the first place. When a startup fails, I imagine it's very hard for anyone involved to avoid consequences, for the same reason it's easy to tell who in a startup is creating what value.

Also, how many millions does a CEO have to make before it qualifies as a 'golden parachute'? The last CEO of Nokia (Olli-Pekka Kallasvuo) had a sallary of 4.8 million euros [1] and the current one (Stephen Elop) got a $6 million signing bonus along with his $1.4 million salary [2]. Evidently, this amount of money wasn't enough, although I realize golden parachutes also involve severence packages that may not be disclosed at this point.

The real question on the effectiveness of golden parachutes is this: Are there any examples of large companies with golden parachutes taking high risks that paid off? Apple might count, but I'm not sure if Steve Jobs feared the consequences of failure after he had already been ousted as CEO once.

[1] http://en.wikipedia.org/wiki/Olli-Pekka_Kallasvuo [2] http://en.wikipedia.org/wiki/Stephen_Elop

The main purpose of a golden parachute and cash comp is to allow a troubled company in trouble to get good talent.

Lets say Nokia's chances of success are 20%, but you have the ability to improve them to 30%. Suppose your pay package is 100% incentive based, you only get paid if Nokia survives. Why would you take this job? You have a 70% chance of getting nothing. It's much easier to go back to MS, and get a guaranteed paycheck.

In a few years, it will be easy to blame Stephen Elop and claim it is unjust for him to be paid even while Nokia tanks. But it isn't his fault that Nokia is in trouble (he's been CEO for 13 days) - he might be their best hope for survival. If he wasn't getting paid cash up front, he would probably just turn down the job and Nokia would be in even worse trouble.

(Not trying to endorse Elop, I know very little about him or Nokia. Just putting a face to the situation rather than speaking in the abstract about CEO A and company X.)

The main purpose of a golden parachute and cash comp is to allow a troubled company in trouble to get good talent.

At $1 million or more per year, you can get all the talent you need. I have more talent than 90+% of big-company CEOs in the US and I will work for less. What is actually being paid-for in getting a big-ticket CEO is connections and reputation. Don't misuse words like that, at least not the word "talent".

Reputation is another way of saying "estimate of ability based on past accomplishments."

I'm sorry that, in spite of having more talent than 90% of CEO's, you haven't actually accomplished enough for people to trust your self evaluation.

Reputation, in this specific case, refers to fame within a small and socially closed set of people who care more about contacts and image than accomplishments.

How long have you been running this conservative/troll schtick? It's entertaining and I commend you for your excellent execution of it. Let me guess, you also post on Autoadmit pretending to be a biglaw partner, right?

Maybe you could back up this claim with some information about yourself? Your HN profile doesn't link to your blog (which I found by googling what I guessed was your name), and your blog's prominently featured 'about' page is the Wordpress template. All I know about you is that you have opinions, express them well, and make up card games.

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