3 Reasons Why It's Better To Be A Fired Sears CEO Than It Is To Be You

Bad at your job? So was Aylwin B. Lewis, president and chief executive of Sears Holdings Corp..

Here are 3 reasons why it’s better to be the fired CEO of Sears than it is to be you:

3. $1.8 million in restricted shares and stock options currently worth $616,875 for doing nothing.

2. Health benefits for doing nothing.

1. $1,000,000 a year salary for doing nothing.

Departing CEO to Get $1M Annual Salary [Yahoo!](Thanks, Tim!)
Sears filing outlines payout to ousted CEO [Chicago Tribune]
(AP Photo/Gregory Bull, file)

Comments

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  1. Chris Walters says:

    Arrrgggh.

    Why can’t CEO salaries be pegged 100% to company performance? CEOs should work on commission only!

  2. friendlynerd says:

    This is why Amurka is broken.

  3. timmus says:

    I think it’s kind of ridiculous that declining profits are enough to force a shakeout. The company earned $820 million last quarter and still expects to post a $400 million profit this quarter. For crying out loud!

  4. timmus says:

    ($820 million = not last quarter but same quarter last year… sorry)

  5. Falconfire says:

    @timmus: Its called capitalism. And its whats destroying this country at a slower pace than communism destroyed Russia. Both systems suck.

  6. Imaginary_Friend says:

    He also gets a pony.

  7. ARP says:

    @cwalters: I think that what stock options are supposed to cover. Companies also limit how much/when they can sell them to encourage long term performance and not “pump and dump” type management. The problem is that with blue chips like Sears, even if they lose 1/3 of their value, they’re still making a mint for doing nothing.

  8. ElizabethD says:

    Salaries and severance packages for CEOs and other tippity-top execs are so out of whack with today’s reality, it’s breathtaking. (and maddening)

    Since for-profits can do whatever the hell they want in this regard, everyday Americans have no way to register our outrage. Or do we? Any suggestions? (for nonstockholders)

  9. ElizabethD says:

    @Imaginary_Friend:
    LOL — you for the win!

  10. catnapped says:

    @ElizabethD: The common assumption would be to not patronize them (the business), but obviously he’d seem to have made an even bigger bonus by driving the company into the ground.

  11. Blueskylaw says:

    I’m sure if I got fired then I would be walked out with my standard issue brown cardboard box by an armed guard and not handed a key to the corporate lollipop cabinet with a wheelbarrow and told enjoy yourself!!!!

  12. @ElizabethD: Invest in companies with rational comp plans. Like in Europe. Join a union (they have limited CEO pay to single digit multiples of line workers + stock options and incentives in Europe).

    If you don’t have ownership stakes, you don’t really have room to complain. The biggest losers from CEO compensation multiplication are the shareholders. Money to a CEO is not money paid in dividends or money reinvested in the business.

    Last thing: SHLD has a $15 Billion with a B market capitalization. It had 51.8 Billion with a B dollars in revenue over the past 12 months. and has nearly $1.5 Billion with a B in cash sitting on it’s balance sheet. Paying a guy a Million (with an M) a year for 3 years is pretty small change.

    Even if you throw in health insurance and a pony.

  13. ARP says:

    I was thinking of forming a professional organization of CEO’s. Nobody special- just some guys with common sense. We’ll tell the major companies we can run your company better than the current CEO (a/k/a not as bad) and we’ll only ask for 1/2 the salary and 1/2 the parachute.

  14. econobiker says:

    I wonder how long those health benefits last? Maybe until 2010 like the salary does.

    If, and only if, it is possible that he has a non-compete clause for the time until his pay runs out so there is the reason for the payout.

    Now the real problem of the whole golden parachute system is why can not these execs make as good deals for the companies they run (run into the ground) as they can for themselves…

  15. apeguero says:

    @ARP:

    The piranhas waiting for a “C” promotion (as in Chief of something), that would be the VPs of the companies, would never allow it. Why? Because this would kill their hopes of ever getting an outrageous golden parachute deal should they ever get that “C” promotion and leave the company.

    An answer would be to tax the “F” out of these corrupt deals!

  16. Bobg says:

    Sears should have hired me as CEO. I don’t know a thing about running a retail operation either. I would have agreed to a severance package at 50% of what they gave that Bozo.

  17. Gort1951 says:

    Look at it this way … even if you’re the worst left-handed pitcher in the major leagues, you can still probably hook up with a team for millions per season. A person who makes it to the CEO level has most likely proved a lot and had a lot of success on the way up, and someone who is a “failure” at an extremely high level of a competitive activity (and running a business is certainly that) can still legitimately be worth a high level of compensation just for their ability to compete at that level. That’s not to say, of course, that there are not many cases of abusive, excessive compensation in the corporate world, but I think the disdain some folks automatically express for people who fail while taking on an extremely challenging high-level job is overdone and small-minded.

  18. rmz says:

    He saw what that Home Depot CEO did and said “hey, I want a piece of that pie, too.”

  19. drrictus says:

    Failing upwards is one of the benefits of making “The Club”.

  20. pureobscure says:

    Here’s a hint of where you people can start: Spend $250K on college/b-school. Work 24x7x365 for the company, its share-holders, board members, fellow cut-throat employees, and the media. Sacrifice friends/family. Travel endlessly. Network obsessively with people you’d rather strangle than talk to.

    Or you can just complain about the inequality and excesses while blowing off work on a message board on the Internet, waxing quixotic about European socialism and the glory days of the American unions.

  21. Nofsdad says:

    Wasn’t there some buzz a couple of years ago about outsourcing CEO jobs to India? There was a group over there that you could hire an MBA from to run your business for a couple hundred thousand and change. I seem to recall that they were already doing a pretty brisk business in Europe.

    Since one of the biggest sources for the funds to pay these obscene salary and benefit packages to bloated CEOs and other top execs comes from outsourcing, it would only make sense to outsource THEIR flipping jobs too, right?

  22. Nofsdad says:

    And are YOU a big shot CEO or just a minor little wannabe with an MBA in one hand and the other in someone else’s pocket?

    Or maybe just another know it all who thinks all that the 66 million working class Americans making less than 25k a year need to do is ALSO “spend $250k” on college and business school and only THEN will they have a right to complain about the total one sidedness that today’s US economy is based on?

    Assuming you’re already part of the “I’ve got min so screw you” crowd, exactly where does that $250k COME from when they’re working their asses off, often at 2 or THREE of the goddam minimum wage/minimum hour, no benefit jobs that are all you and your big shot heroes will hire them for, while you enjoy all those bonuses and perks and get your health care for noting and use the company jet to fly the family flipping dog to the vet?

    I’ve never understood the economics behind that particular contention and when your mindset is built around the belief that having SPENT $250k (whose money?) in such a manner, you are automatically entitled to occupy positions wherein you drag down as much as 480 times the compensation of the average worker in your organization.

    And do you truly believe that if these 66 million people were able to obtain that $250k and get that little piece of paper that you claim entitles you to a place in the aristocracy, that there would actually be enough jobs out there to put them all to work or enough trillions to pay them for sitting on their bloated asses and watching some hedge fund honcho loot the business?

    That rhetoric might have worked a few years back right after your type took this country over and ran it into the ground in the name of your flipping “bonuses”, “golden parachutes”, incentives and all those other euphemisms you’ve come up with to describe sucking all the cream from the top while your flipping business goes into the toilet.

  23. bbbici says:

    CEOs are not entirely culpable for poor corporate performance.

    How many of us have thought a job would be great, only to find out coworkers and managers were retards?

    You can’t make a silk purse…

  24. Kounji says:

    @pureobscure: Sheez you don’t give us any room at all huh. Yeah regardless neither of those sound like a complete win-win for the soul.

  25. b-real says:

    I love it when these compensation deals are made public. What right do non-shareholders have to complain about remuneration packages? You’re angry that someone is making millions of dollars a year and you aren’t? Perhaps you should have made a few more A’s in college!

  26. @pureobscure: I work for the government. You’re paying me to wax quixotic about Europe’s version of capitalism and the glory days of unions. MUAHAHA!

  27. @pureobscure: Oh yeah, and I got my college and MBA cheaper than a quarter million. If you work really hard in high school, you can get scholarships on the undergrad. Then if you put in a month on GMAT prep, you can get money for the MBA.

  28. clevershark says:

    My current employer can fire me on a minute’s notice with no explanation, if they give me a million a year and health benefits for doing nothing.

    I’m guessing this is just Sears exercising the exact same sort of business acumen that’s made them SO profitable in the past year!

  29. HOP says:

    sears is going down the tubes…usta be a good place to shop….stopped going to sears about 2yrs ago…had a bad experience there……..

  30. TechnoDestructo says:

    @cwalters:

    When you’re deciding the salary of the guy who decides your salary, you’re inclined to overpay them.

  31. jrdnjstn78 says:

    Randy Jackson is the ex-CEO??? I bet they fired him because he was too busy doing the American Idol thing to do his job at Sears

  32. frogman31680 says:

    I hate to say it but I worked for a Kmart in my area. Whenever you are hired on, you have to watch 8 hours of training videos on this guy talking about the company motto, why they picked that motto, how business works when living by that motto, and every other aspect of the motto they could come up with. Then they did a recap of EVERYTHING about the motto.

    Best sleep I’ve had in a while. Maybe they should save company payroll time and just give us a booklet to ignore like everyone else.