Duke Energy CEO Gets Golden Parachute...Cue the "More Government Regulation!" CatcallsSubmitted by LibertyEntrepreneur on Sat, 07/07/2012 - 17:59
Hi everyone, I'm new to posting on DP (this is my first forum post).
Not sure how many of you have already seen this but last week, the Duke Energy CEO resigned after 1 day on the job. This (somehow) resulted in a payment of $44 million to him in the form of a "golden parachute".
I, along with every sane, rational human being believe that $44 million for one day on the job is at least slightly ridiculous. That said, calls for increased regulation are unnecessary. First of all, unless you are a Duke Energy shareholder, this doesn't affect you in any way. In fact, as the left likes to say, Duke Energy will have less cash to "hoard" and its likely that the former CEO will spend his money, therefore stimulating his local economy to some extent.
There is only one group to blame in this case and that is the shareholders of Duke Energy, and by extension, the Board of Directors (who are elected by the shareholders). It was in their power to prevent some of the ridiculous clauses in the CEO's contract, such as accelerated vesting of stock awards. The whole point of stock vesting is to ensure long term commitment of key employees! So, in general the Board and shareholders are pretty much at fault in this case for not guarding against this.
There have been calls to create new regulations against "golden parachutes" and this is only going to add fuel to the fire unfortunately....