What if C.E.O. Pay Is Fair?

Ah, what it must feel like to be in a position where they have to bring in a consulting firm just to figure out how to pay you.

Playing the devil's advocate, I think large severance packages can be good for the company. A phenomena you see in the military, and I would expect any other place with large responsibilities, are leaders unwilling to make the tough calls. Why? Because a bad decision can cost them their career, their family's livelihood, and may even mean a court martial.

So, in the corporate world, a large severance package can encourage the CEOs to make those tough calls. Of course, the other side is that taking away repercussions can lessen the gravity of a decision, and a leader may not exercise due diligence. Hence, large severance packages are more a balancing act than something we should direct our moral outrage against. In my opinion, it is often better to make a tough decision, even if it is wrong, than to wait in paralysis.