This is the reward for making air travel into a horrific ordeal, and destroying many years of good will by gutting its frequent flyer program ( $37 M is a lot of free biscuits at biscuit time). By the way UAL stock is currently cratering (incredible in a 300 million + nation with a five airline aircartel.) Pretty much every penny forked over here by the board was purchased at the cost of some deterioration for the passengers in the "friendly skies", jammed like sardines watching the "funny safety video.". Next time your boarding process takes 45 minutes in the hot sun, whilst people try to avoid the baggage fees and f/a's have to stroke out handling bags, something to ponder. Since the airlines sponge so much off the taxpayer, and saddle them with costs such as pension bailouts, shouldn't Congress be looking at clawing back some of this cash (I am sure that would go down well with a terrorized and demoralized workforce.) http://www.bloomberg.com/news/artic...-million-after-his-ouster?cmpid=yhoo.headline
37 million will not get you on this list.. But since you probably just want to see the list so you know how much to envy/hate/worship/aspire to become these erstwhile titans of industry, so here goes, in order from √ºber-huge parachute to merely gaudy: John F. Welch Jr.; General Electric (1981-2001) $417,361,902 Lee R. Raymond; Exxon Mobil Corp. (1993-2005) $320,599,861 William D. McGuire; UnitedHealth Group (1991-2006) $285,996,009 Edward E. Whitacre Jr.; AT&T (1990-2007) $230,048,463 Robert L. Nardelli; Home Depot Inc. (2000-2007) $223,290,123 John A. Kanas; North Fork Bank (1977-2006) $214,300,000 Fred Hassan; Merck & Co., Inc./Schering-Plough (2003-2009) $189,352,324 Louis V. Gerstner Jr.; IBM (1993-2002) $189,005,929 Hank A. McKinnell Jr.; Pfizer Inc. (2001-2006) $188,329,553 Thomas M. Ryan; CVS Caremark Corp. (1998-2011) $185,415,435 James M. Kilts; Gillette Co. (2001-2005) $164,532,192 Robert J. Ulrich; Target Corp. (1994-2008) $164,162,612 E. Stanley O’Neal; Merrill Lynch & Co. (2002-2007) $161,500,000 Jerry A. Grundhofer; U.S. Bancorp (2001-2006) $159,064,090 Joel F. Gemunder; Omnicare, Inc. (2001-2010) $146,001,476 Wallace D. Malone Jr.; Wachovia/South Trust (1981-2004) $125,292,818 George A. L. David; United Technologies Corp. (1994-2008) $122,631,309 Margaret C. Whitman; eBay Inc. (1998-2008) $120,427,360 Leonard Schaeffer; WellPoint Health (1992-2004) $119,041,000 Bob R. Simpson; XTO Energy Inc. (1986-2008) $103,485,972 Thomas E. Freston; Viacom (2006) $100,839,772
The Chicago Tribune has a great column on the "high cost of mediocrity" pointing out how the now-departed CEO used to emphasize the need to save money in every way possible (as he leaves under investigation, but with $37 Million") As the columnist eloquently puts it: "...Nothing was so cheap at United that Smisek was unable to cheapen it further.... Conveniences, services and small comforts disappeared, were diminished and/or attached to add-on fees and upsells. More than the off-brand coffee Smisek's regime embraced grew bitter." http://www.chicagotribune.com/busin...lden-parachutes-0505-biz-20160504-column.html
Since it appears his departure was due to his own misconduct (I guess whether it was criminal or not remains to be determined in the investigation), one could argue that he's not entitled to a golden parachute. If I were a stockholder in UAL (I'm not; despite some opinions to the contrary Mom didn't raise anyone that foolish), I think I'd be considering a stockholders' suit to force the Board to take any unearned portion (i.e., not deferred compensation) back.
There is a particularly bad irony of United getting $mi$eked. Neither the United employees, customers, or shareholders should have to reward such incompetence and malfeasance.
Folks, everyone saying "he is not entitled to his golden parachute" is, simply stated, wrong. None of us have the complete details of his employment agreement. We don't know the terms of it, but we can all rest assured that UA is not giving out a penny to Smisek that they are not contractually obligated to. Maybe he doesn't deserve it, but he certainly is entitled to whatever he gets.
Clearly another over-entitled executive I am sure UA employees will provide him with outstanding service on all his future life-time free travel trips.
You're right, of course. I haven't seen his employment contract. However, it is usual these days to condition golden parachutes on the departure not being "due to own misconduct" or "for cause". If the news reports are true, it would appear that his actions could qualify under such a clause. When it comes to senior executive compensation packages, I afraid I don't have as much faith in compensation committees on the Boards of Directors as you do. I tend to question whether multi-million dollar packages truly reflect the value that CEO has added to the company. Membership on Boards of Directors can overlap, with the CEO of one company also sitting on the Board of another, and I wonder how much a friendship or a "one hand washes the other" philosophy drives the ever-larger CEO packages and golden parachutes. But that's a rant for another time.
Seems like the right parachute would have been $0 Calculated as follows: +$37 million for the revenue he got them through short term gimmecry -$37 million for destroying the brand and driving customers away
