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Comment by coldtea | Hacker News Reader

>I'm not angry at Mayer at all, I just don't understand why companies agree to golden parachute deals like this for failure.

Because "the company" that decides is the board -- and these people rub each other's backs...

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I wish this was researched more. The same group of interconnected people serve on board or C-levels of companies. They happily give raises and generous offers to others, because they know that when their turn comes, the others will do the same to them. Meanwhile, small-time shareholders are powerless, because a large chunk of the shares are held by institutions who don't want to rock the boat, and are just happy that things are fine the way they are.

Sociology of elites looks at this kind of thing. One fairly easy thing to do is to do a network analysis of board membership. The ones I've seen tend to describe what you already know anecdotally, a small group of elites controlling a large number of central companies.

That, and also probably because otherwise CEOs would take ZERO risks. Not sure if that's a good thing or a bad thing.

If a CEO doesn't have any negative sequences from their decisions, then any "risky" decisions they take for the company are not actual risks for them either.

In the cases where the golden parachutes are absurdly large, I don't really see how they're really incentivized to take risks either. Perform or don't perform, the difference is the CEO's yacht size, or how many mansions they own around the globe?

I'm constantly amazed by how many people either don't understand this or simply refuse to acknowledge it.

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