CEO's Favorite Toy? The Golden Parachute.
R Us shareholders approved a $6.6 billion buyout by an investment group.
joining the Toys R Us as CEO in 2000, John H, Eyler has seen the beleaguered company
steadily losing market share to discounters such as Wal-Mart. Eyler's annual total
compensation is approximately $2 million, split evenly between cash and bonus.
So what happens to a CEO that runs a company into the ground? He gets rewarded
with a golden parachute of course.
Eyler is due $65 million from the sale,
making him the largest individual beneficiary of the expected payouts to senior
executives. The remaining officers and directors of Toys R Us Inc. are expected
to receive a total of $187 million.
According to the proxy filing, Toys
R Us Vice Chairman Richard L. Markee could collect $1.7 million and Chief Operating
Officer Christopher K. Kay and Executive Vice President John Barbour each stand
to receive $1.4 million.
With government regulators focused on investigating
corporate fraud, why not start with the obvious and curtail golden parachutes?
The beneficiaries are the same individuals that propose and approve the amounts.
With the specter of monetary fines and extensive jail sentences, senior executives
don't need to commit fraud. They can enrich themselves at the expense of shareholders
by running the company into the ground before selling it to investment groups
that recognize the value of the assets. I would expect the Sarbanes-Oxley Act
be amended in the future to limit these golden parachutes.
2005 Nelson Chin.
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