While TV viewers love to hear the words, “You’re Fired,” from Donald Trump, few would ever want to have that conversation with their own boss. That is, unless they are the boss and managed to negotiate a hefty separation package.
So-called golden parachutes are contractual provisions that compensate executives, if they are terminated without cause. And according to a first-of-its-kind report, the payout practice has guaranteed several outgoing chiefs with nine-figure landings to help soften the fall from their corner offices.
The biggest parachute according to GMI Ratings Report? More than $400 million awarded to Jack Welch, after he served as General Electric‘s CEO from 1981 to 2001. While Welch is widely credited with turning GE into a global conglomerate powerhouse, the report does not compare an executive’s performance with the amount of their compensation. Rather, its authors say the purpose of the survey was to cast light on the amount of compensation that was awarded above and beyond the salary provided during the CEO’s tenure.
‘He [Jack Welch] was already paid for that performance, while he was acting as CEO. These parachutes are awarded after the fact, after they’ve left,’ said Paul Hodgson. Hodgson helped gather data for GMI‘s report that included executive packages from 2000 until 2012. While the company has been gathering information on executive compensation since it was founded in 2000, this is the first time the findings have been published in a comprehensive report.
According to the study, 21 CEOs received more than $100 million each in “‘walk away” packages. In all, companies like GE, Exxon Mobil Corp., ATT and Home Depot Inc., have collectively provided nearly $4 billion in golden parachutes. But according to Hodgeson, those figures could be on the low-side.
‘These numbers don’t include