The True Cost of a Golden Parachute

So Viacom chief executive Tom Freston is out — forced out, i.e., fired. But he leaves with a nice parting gift: about a hundred million bucks and at least that in un-used stock options.

Which got me thinking: What keeps a hotshot executive hot when he has nothing financially to fear if he gets cold? Where's the motivation? Where's the impetus?

Look, it's a free market and every uber-executive is a free agent. I just wonder about the price it's costing.

After all, if you're sure to get a lot of money on the way out, why would you work so hard while you're still in?

Now, I don't think Mr. Freston was ever guilty of being lazy. By almost all accounts, he created multi-billion-dollar assets which sparkled, versus a relationship with boss Sumner Redstone that clearly did not.

I know how that goes.

What worries me isn't so much what we pay promising executives, but the risk-reward relationship we've forgotten with promising executives.

As Jack Welch himself encouraged: reward greatness, penalize failure — not before the fact, but "after" the fact.

Freston is a richer man for having tried and failed. All too many leave with that kind of dough having never tried at all.

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