Quote:
Originally Posted by Baraka_Guru
Severance pay is common in general; golden parachutes are not.
Golden parachutes in particular are there for a reason: to keep executive positions marketable. If HP decides tomorrow to cap their CEO severance package to $25,000, they're going to have a tough time filling the position with candidates they'd like to consider. This is because all of their competitors will still have their golden parachutes. HP would only have a regular one---probably white nylon.
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So, basically, the real reason that executives are given these fat going away prizes is because everyone else is doing it.