[fredophile]

Whenever I see people complain about C level exec's salaries I see one of two arguments used in favour of it. First, people will say that their compensation is tied to performance either through bonuses for milestones or stocks. Second, people will say it's compensation for risk. If you still get most of the money after running the company into bankruptcy then neither of the two applies.

The only reason I can see paying out in this case is if the exec was brought on to turn the company around and this was always a known, likely outcome despite anyone's best efforts. I'd also argue that in that scenario they should have negotiated more salary instead of stocks and bonuses.

[sokoloff]

If you are a shareholder in a failing company and looking to hire a turnaround CEO, do you want them to be bleeding the company dry in high salary every month or do you want them taking a modest cash salary each month and have their economic incentive be to drive the turnaround of the equity in the company, so they get paid for saving your investment not for putting in the months?

[fredophile]

I'd prefer to pay the higher salary instead of a low one followed by paying out a big bonus if they fail.