Thursday, February 03, 2005

But All the Other Kids are Doing It

Michelle Leder at (always recommended) finds another case of corporate "monkey see, monkey do." Seems when it comes to corporate management compensation, the sine curve is getting less steep every day:

Remember when you were growing up and your friends did something dopey and your mom would inevitably tell you, "If your friends jumped off a cliff, would you follow them?" At Aon Corp. (AOC) the answer appears to be yes. In a recent 8-K, the company disclosed a new "executive special severance plan" that will pay 11 of its most senior executives three times their base salary plus gross-up payments and a whole host of other goodies following a change in control, which the company stresses is just a hypothetical situation. The reasoning? A consultant Aon hired determined that 90% of all other publicly traded companies have similar arrangments. A second group of executives -- the company only describes them in the filing as fewer than 100 -- will only receive two years worth of salary and no gross-up payments.

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