Some execs are getting a “pity bonus” in their stockings this year. With the recession on, many execs are finding it hard to meet earnings targets or suffer from pummeled stock prices. So boards are having heart and changing the rules so the execs can still get a bonus.
Aw, the rules are just too hard in this recession, so we’ll just reward you anyway. And here’s a lollipop for being such a good sport.
Paying bonuses during tough economic times could potentially become palatable, said Paul Hodgson, senior research associate at the corporate governance research firm The Corporate Library.
To do that though, he said boards would have to be just as willing to cut bonuses when executives miss lofty targets during a robust economic environment.
“That never happens,” he said. “I’m prepared to accept the logic on that point if there was a flip side to it.”
Some execs get ‘pity’ bonus [CNN Money] (Thanks to Angus99!)