Why do technology executives always get huge amounts of compensation?

Yahoo recently fired a COO, the severance of billions of dollars, this is a bit exaggerated ah! Why do executives at foreign tech companies get sky-high compensation for not doing anything? Yahoo Original COO Henrik De Castro Severance payment due to the huge amount, attracted the public attention. But this data is not the official data that Yahoo publishes, but is the value that the Equilar company that specializes in the calculation of executive pay estimates. Foreign executives receive huge severance payments, with IBM's former CEO Gerstner 189 million of dollars in severance payments, and ebay's former CEO, Whitman, received 120 million dollars in compensation. Not only the technology industry, the CEO of the traditional company, such as Exxon Mobil (ExxonMobil), former president of R. After the departure of the compensation for as much as 320 million U.S. dollars, GE's former chief executive Welch from the company received 417 million dollars of "sky-high" severance payment. High-priced severance from big business executives is rife and controversy persists. The original Nokia CEO, Elop, left 18.8 million euros to leave the money, sparking the anger of the Finnish people, even the Finnish prime minister has openly said "too outrageous." There are three main reasons why foreign executives are so generous in their severance payments. First, the equity incentive accounted for the big head of Elop's severance payment mainly includes three aspects: 18 months of basic salary compensation, a short-term management of cash rewards, the two items together is 4.2 million euros. The remainder was awarded to Elop, about € 14.6 million. R., who retired in 2005, includes about $180 million worth of shares, 18 million of dollars in salaries and bonuses, a lump-sum pension of about 89 million dollars, a one-time pension and the current value of previous grants. If special treatment such as pensions and pensions is removed, the bulk of severance payments remains equity and options. It is not clear that Yahoo's original COO Henrik De Castro Severance payments, but equity awards are likely to be the most important. Castro worked at Yahoo for 15 months, excluding severance payments of about $39.2 million trillion, less than half the amount of severance payments. During the Castro's work, Yahoo's share price doubled, and the value of its equity holdings increased significantly. The role of equity incentives is obvious in order to urge executives to be conscientious and to contribute to the company's development and share price boost. Second, the "Contract guarantee" culture of foreign senior executives in order to avoid corporate executives too much value short-term performance, many large multinational companies have adopted the executive, especially the CEO of the contract guarantee measures. A fixed period of three to five years would normally be set, during which the Board could not dismiss the person even if the executive's performance was unsatisfactory. In this way, executives can get more free space, not because the company's poor operating performance and cut research and development funding for the long-term development of the company is very important investment. But eventually, if the board is very dissatisfied with the executive, it can also choose to pay the agreed severance payment and dismiss the executive, rulesis still flexible. Third, the executive turnover compensation can not only be determined by the performance of the company although the CEO position is very important, but the company's performance will be affected by a number of factors, the company's poor performance does not necessarily represent the personal ability of senior executives have problems. and enterprises in order to attract talent, the executive to give special incentives, there is a reasonable place. But Mr Castro's departure was a tough decision that Mayer had to make. After the honeymoon, Mayer needs to prove to the board and shareholders that there are signs of improvement. Apparently, Ms. Mayer has changed the role of Fidel Castro in Yahoo, which is responsible for the poor performance of Yahoo. Yahoo's advertising business failed to meet its expected sales in the second quarter of last year. Mayer thinks Castro has missed business opportunities and is acting arrogant in front of advertisers.