Golden parachutes can’t seem to stay out of the news. Last year, Jeff Smisek, the former CEO of United Airlines, received a separation payment of $4.875 million in cash along with additional equity awards and other benefits for a total of close to $37 million after being ousted from his company. FOX News Chairman Roger Ailes was reported to have received an exit package worth $40 million after being ousted from his job amid sexual harassment claims. And Wells Fargo CEO John Stumpf, already under fire for a fraudulent bank account scheme, has faced tough questions about his salary and the multimillion-dollar retirement package of Carrie Tolstedt, a key executive tied to the scandal. Both Stumpf and Tolstedt have been forced to forfeit millions in stock options and other compensation.

Golden parachutes like these are hardly novel in American business. What’s changed, however, is what can trigger such paydays. Golden parachutes such are now paid out even when executives leave amid scandal. And while many now contain “clawback” provisions, those tend to be inconsistently applied. Smisek, for example, resigned in the scandal of a federal investigation into whether United Airlines had unduly influenced David Samson, the chairman of the Port Authority of New York and New Jersey (Samson eventually pleaded guilty to a bribery charge this year). Ailes’s reported payout came after a raft of sexual harassment allegations and a lawsuit by former Fox News anchor Gretchen Carlson (who received a $20 million settlement). Read More