Just last week in my employment relations course, I presented some research on severance and resignation packages. A severance package is merely a pay and benefits package an employee receives when he or she involuntarily leaves employment at a company. These packages include everything from stock options to insurance coverage.
Biggest severance package in history? Remember that time Jack Welch was given a package estimated at around $417 million because GE just didn’t want him anymore? That story topped the charts and went down in history. Compared to BlackBerry’s most recent payout to Thorsten Heins at $22 million, GE went crazy.
But, now, large severance packages are expected of top management. The newest fad seems to be large compensation packages-almost opposite of the severance deal. A compensation package is a combination of salary and fringe benefits an employer provides to an employee. So with severance, the employer entices you to leave. With compensation, the employer entices you to join.
8 hours ago, Mashable released an article on the new CEO of BlackBerry’s compensation package. The CEO is John Chen and he will be receiving a salary of around $1 million plus a performance bonus of about $2 million. His package does include stock options.
What do you think about outrageous severance packages, and now high compensation packages?