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Friday, January 4, 2008

Personal Finance QuickTake: Ex E*Trade CEO Cashes In...





Fortune Magazine Online ran a great story last night about the former head of E*Trade's Golden Parachute. In recognition of his ability to drive E*Trade down 84% by entering into super-risky sub-prime loans Mitchel Caplan received a severance package worth $10.9 Million in cash plus lifetime medical.


Let me go on the record ( I guess I am anyway since this is on the web) that I believe a CEO should share in the riches if a company does well. I expect to get paid in my job I do not begrudge someone their money for doing the same. I also understand that, like with professional athletics, the a company will pay someone very well if they can help the team, because it is a good investment. If I was paid $10 Million, but I increased shareholder value $1 billion, my pumpkin head is gonna rest easy...


That being said, their is such a thing as admit you were wrong, even with the best intentions, and parting ways. I believe in severance as long as their was no wrong doing. But if you lose 84% of the value of a company, have the decency to leave a couple bucks in the till on your way out...

2 Comments:

Fiscal Musings said...

I couldn't agree more. We've seen a lot of departing CEOs recently that are walking away with millions from companies they've left in the dumps.

RacerX said...

We all end up paying for it in higher fees!

Thanks for commenting and reading!

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