CEO Gets $210 Million Golden Parachute, Workers and Investors Foot the Bill
by | January 05, 2007
How would you like to quit your job and yet be paid a whopping $210 million (yes, you read right) in severance payments? If you're former Home Depot CEO Robert Nardelli, that's what you get for six years of service. Who wouldn't like to be unemployed under those circumstances?
Did you know that in the first two hours and two minutes of the first workday of the year, CEOs of large companies made more money than a minimum wage worker makes in an entire year? For a full report on the Nardelli case, including an appearance by AFSCME's Rich Ferlauto, check out this video from CNN's Lou Dobbs Tonight.
Talk about a golden parachute -- or platinum, as AFSCME President Gerald W. McEntee said in his statement earlier this week. It seems that in corporate-governed America your retirement security is at risk... unless you happen to be a CEO.
And guess who gets to foot the bill? Union members participate in benefit plans with over $5 trillion in assets. Runaway executive pay not only hurts working men and women who are invested in the company but also diminishes returns for our funds.
"We're aghast at the level of compensation that Nardelli is walking away with -- this is money directly out of shareholders' pockets," Richard Ferlauto, AFSCME's director of pension investment policy, told the New York Times.
It's high time that someone paid attention to the issue of ballooing CEO compensation. Congress dragged its feet for years when it came to raising the minimum wage, an issue which is coming back to the forefront as Democrats make it part of the 100 Hours Agenda. Yet politicians haven't made so much as a peep when corporate salaries come under scrutiny.
This inaction could change as Rep. Barney Frank (D-MA), incoming Chairman of the House Financial Services Committee, has indicated his support for the AFSCME campaign to give shareholders a say in approving CEO pay and plans to hold Congressional hearings on this issue.
AFSCME Director of Pensions & Benefits Richard Ferlauto told CNBC's Erin Burnett why he's happy Home Depot CEO Nardelli is gone, and why he is continuing to push for reforms on the issue of CEO pay. Go to CNBC's website to watch the video clip of his appearance, and for more information on the issue of pension security, check out AFSCME's website: http://www.afscme.org/pensionsecurity
