Popping the Golden Parachute
by Michael Fox
Seems to be the latest idea. The NYT story, Lawsuit Contests Pay Package Hewlett Gave to Former Chief, describes a suit filed by two union pension funds challenging the severance package given to former HP CEO Carly Fiorina. This suit may have more foundation as concerns over an earlier severance package, $17 million to Michael Capellas for his seven month tenure as President, led to a shareholder approved policy to limit future severance packages.
This is not the first, nor likely to be the last such suit. Disney shareholders failed in their attempt, but the firm bringing this action is said to be making a specialty of such claims. According to the story:
Grant & Eisenhofer, based in Wilmington, Del., is making executive compensation lawsuits its specialty. The law firm said Siebel Systems had agreed to cancel options worth more than $60 million after the firm filed a lawsuit. The lawyers also said that as part of a settlement, some officers of Lone Star Steakhouse and Saloon agreed to changes in the pricing of their options. The firm said it had cases pending against Cisco Systems, Tyson Foods and the American International Group.
Another manifestation of what seems to be growing unhappiness with oversized executive compensation and perks.