The resignation of United Airlines CEO Jeff Smisek is all kinds of juicy. There's corruption—United established a money-losing route to curry favor with the then-chair of the Port Authority by getting him more conveniently to his vacation home. There's political intrigue—said then-chair of the Port Authority was Gov. Chris Christie's appointee, and one of the few people Christie refused to throw under the bus during Bridgegate. And there's plain old bloated CEO pay and raging economic inequality, because check out Smisek's severance package:
He will receive at least $21 million in cash and stock, fly free for the rest of his life and keep his company car. Then there is the parking.
He can park free in downtown Chicago and at airports in Houston and Chicago — for the rest of his life.
Resigning because of a federal investigation into what sure looks like blatant corruption, and he's getting $21 million, free flights for life, and more. Somehow I don't think a rank and file United employee would get that kind of consideration for far smaller offenses. It's not unusual, though. CEO severance is a great example of the accountability gap—gulf, really—between those at the top and the rest of us. As in, we're held accountable and they're not.He can park free in downtown Chicago and at airports in Houston and Chicago — for the rest of his life.
“The way that CEO employment agreements are written, you really have to commit a felony before they can fire you and not pay you anything,” said Paul Hodgson, a partner at BHJ Partners, a compensation research firm. “Just being bad at your job or immoral or unethical or whatever is not enough usually.”
Let's just repeat that. "Just being bad at your job or immoral or unethical or whatever is not enough usually" to have your tens of millions of dollars in severance (and possibly your free flights and company car and free parking) taken away from you. If you're a CEO.