61–70 of 306 posts
This sort of thing ought to be grounds for a lawsuit from shareholders, or other creditors.
Earlier quoted context omitted.
Perhaps it would make more sense to you if the headline were phrased: "On eve of bankruptcy, US firms restore a fraction of executives' previous salaries with retention bonuses, now that their options and RSU's are worthless, which of course made up most of their salaries." But that doesn't sell clicks as well to people who already have their minds made up.
I don't know about selling clicks in general but, for me, that headline is even more compelling. Corporate executives' salaries are canonically justified by the fact that they're tied to the success of the corporation. If executives get their millions even when their corporations tank, I see a serious problem.
Hmm. Under US bankruptcy code any payment made in the 90 days prior to filing is subject to being undone by the court (you have to pay the money back). Perhaps this rule doesn't apply to employee bonuses??
Not sure if that’s a require for every bankruptcy or not.
While it looks immoral if you don't understand the mechanics, people are simply responding to incentives around bankruptcy laws. Nobody wants to try to turn around a bankrupt company at their old salary (with their old RSU's and options now worthless). The real question is, should Chapter 11's even be allowed for corporations (as opposed to Chapter 7)? Shareholders vote for these because they know that in a Chapter 7…
Earlier quoted context omitted.
> Are you going to stick around and try to dig out the company without a retention bonus? No. You have a couple of times framed opposition to executive bonuses in these situations as "simple" and "emotional", while expressing an appreciation for "creative destruction". So, if an executive would rather leave than turn a company around while tightening their own belt -- especially given that some of these executives ca…
You’re assuming that there is a pool of hypothetical executives who are a) familiar with the industry, b) familiar with the company, c) available, and d) willing to earn an amount less than what the existing executives are offered here, and e) willing to take a very risky job that will likely end fairly shortly. I’m not an expert but it seems like these people may not exist and that keeping the existing management on…
Xenophon wrote about the march of the 10,000 Greek mercenaries whose officers were murdered by the Persians, inside Persia. They elected new officers, swearing to obey their orders, and fought their way out of Persia, returning the survivors to Greece.
Earlier quoted context omitted.
It still sounds immoral even if you read the rest of the comment.
Perhaps it would make more sense to you if the headline were phrased: "On eve of bankruptcy, US firms restore a fraction of executives' previous salaries with retention bonuses, now that their options and RSU's are worthless, which of course made up most of their salaries." But that doesn't sell clicks as well to people who already have their minds made up.
Of course they do. How else do you get people to stick around on a sinking ship? You and I wouldn't stay out of some sense of altruism, why would they? Heck, tech companies have to vest stock options over 4 years because most people would take the money and run. What does everyone think happens when everybody quits because there's no reason to work there? The money is just returned to investors? Even if that's all yo…
Of course they do. How else do you get people to stick around on a sinking ship? You and I wouldn't stay out of some sense of altruism, why would they? Heck, tech companies have to vest stock options over 4 years because most people would take the money and run. What does everyone think happens when everybody quits because there's no reason to work there? The money is just returned to investors? Even if that's all yo…
The executives set broader directions and hire people to keep the lights on.
Use the money that would have been executive bonuses for retention packages that make sure the lights stay on.
Honestly, even a juicy bonus isn’t going to keep many executives at a sinking ship unless they’re not able to find another job.
While it looks immoral if you don't understand the mechanics, people are simply responding to incentives around bankruptcy laws. Nobody wants to try to turn around a bankrupt company at their old salary (with their old RSU's and options now worthless). The real question is, should Chapter 11's even be allowed for corporations (as opposed to Chapter 7)? Shareholders vote for these because they know that in a Chapter 7…
So they quit, and someone hungrier + lower on the ladder gets a chance to prove themselves by turning the company around, rewarded by staying in the position when it's cushy again.
I doubt most of the executives see themselves as personally responsible for the financial situations of their companies, especially during an unprecedented global economic shutdown. Not because they are any different from you or me or any of these other self righteous commenters, but because they are the same.
If American culture were more like ancient samurai culture, perhaps they could commit seppuku to restore their honor. But I would prefer to restore proper incentives instead, and weaken the power of chapter 11 so this isn't a problem in the first place.
Earlier quoted context omitted.
I don't know about selling clicks in general but, for me, that headline is even more compelling. Corporate executives' salaries are canonically justified by the fact that they're tied to the success of the corporation. If executives get their millions even when their corporations tank, I see a serious problem.
It's an interesting failure mode I've only recently started to see clearly--- before bankruptcy, shareholders are comfortable, thinking, "w/e, if the company goes bankrupt, our management gets nothing." But they fail to realize that if the company does go bankrupt, or close to it, it will be hard to find a replacement for someone with that level of knowledge of the firm. So the initial implied threat is now toothless…