"When Apple set performance targets for fiscal 2025 for CEO Tim Cook and his executive team last year, the board set goals at or below the prior year's result, citing 'trade policy' and an 'uncertain macroeconomic outlook.' As my colleague Amanda Gerut points out, that essentially guaranteed that Cook would take home a $12 million bonus, no matter how well he did."
"In an analysis of 50 public companies by Compensation Advisory Partners (CAP), published Friday, researchers found that boards set lower targets, wider performance curves and flatter payout ranges to protect CEO pay last year. The result: Pay rose 8% and bonuses were up 4% in the group while revenue rose slightly and earnings were down."
"When taxpayers rescued big banks during the 2008 financial crisis, some characterized this as privatizing the gains and socializing the pain. But in bad times, few are above turning to the government for support. If you're not too big to fail, you might be mission-critical, a social good or a bulwark against China."
Executives and boards employ strategic tactics to protect compensation packages during economic downturns. Companies reduce performance targets, widen performance curves, and flatten payout ranges to ensure CEO bonuses remain intact despite market challenges. Apple exemplifies this practice by setting fiscal 2025 targets at or below prior year results, citing trade policy and macroeconomic uncertainty. Analysis of 50 public companies shows CEO pay rose 8% and bonuses increased 4% while revenue remained flat and earnings declined. During difficult periods, executives adopt selfless rhetoric emphasizing collective challenges while privately securing personal financial protection. Leaders frequently blame external factors like economic conditions and industry headwinds for disappointing results rather than accepting accountability.
Read at Fortune
Unable to calculate read time
Collection
[
|
...
]