Hard Proof on My "Two Worlds" Theory

Good morning gang,

A few posts back I wrote about the enormous severance package that the Merill Lynch CEO received as he was shown the door from the executive suite for non-performance.  On the way out the board was kind enough to soften the blow and his hardship with a $160 MILLION package!  Oh, I hope he can get by and lift up his bruised ego.

This morning, more news on this front.

The CEO of Citigroup, after being shown a similar exit for non-performance, picks up a package of stock options, grants, and other benefits estimated to be worth $29.5 million.  To help him in his job search, now that he is unemployed, Citigroup has given him use of an office and a driver.  Actually, he gets those for the next 5 years, or until he gets another job.

Huh?

If you had $29 million in the bank, a free office, and a free driver, how motivated are you going to be on that job search?

Let's dial this in to our personal lives.  Of any friends, family members, or work associates you now that have lost their job and had to be in search of new employment, what kind of treatment do they get from their former employer?  Nothing close to these sort of packages, that is for sure.

Maybe Citigroup has greater problems when their actions for their top executive's non-performance is to lavish him with money and some great comps.  It's like they are a casino, favoring their biggest gamblers and those that are losing big money at the tables.  Oh, you just lost $50,000, here is a free luxury suite for a night to soften the blow!

Two worlds.

Do you see them?

www.BrettGrendahl.com

Comments

[Tom]

Brett-
Did the ML CEO really get a "160mm severance package" as you've loudly stated, or did he actually get the various retirement/investment accounts that he had personally accrued throughout his 21 year career at ML? If you read the story the board gave him nothing. Usually you've got decent info, but on this one you've missed badly.

( DJ ) 10/30 04:20PM DJ Merrill: Chmn O'Neal Won't Get Severance, Annual Bonus
DOW JONES NEWSWIRES

Merrill Lynch & Co. (MER) disclosed Tuesday that Chairman and Chief
Executive Stanley O'Neal will receive no severance or annual bonus after his
ouster from the company.
However, O'Neal will retain an accumulated stock and benefits package valued
at $161.5 million, according to O'Neal's separation agreement filed with the
Securities and Exchange Commission.

[Brett Grendahl]

Hi Tom,

Thanks for your comments. Let's examine the simple facts.

He was shown the door for non-performance of his CEO duty. He leaves with $160+ million, along with a free office and driver for 5 years.

Did he really need free anything when you've got $160 million coming your way?

My main point was, when you are being let go for not doing your job, why the presents on the way out? Should Michael Vick get a jail sentence at a Ritz Carlton? I am only shining light on another glaring example of a big dichotomy in our society these days.

I'm all for people getting the fruits of their labor. However, when a company is writing down billions against its balance sheet I'm a little cynical about some unnecessary perks thrown to the CEO who is pushed out the door.

Warm regards,
Brett