E-Commerce Times Talkback
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Urban delivery e-tailer Webvan (Nasdaq: WBVN) said Wednesday that it will pay
former chief executive officer George T. Shaheen US$375,000 per year for
the rest of his life, as part of a supplemental retirement package that
was negotiated before Shaheen began his employment with the company.
"To put it into perspective, you have to understand the caliber of executive
Shaheen is," Webvan spokesman Bud Grebey told the E-Commerce Times. "To
lure any executive of that level, you're going to need to provide the
incentives that make up for the opportunity costs. He was taking on a
very significant risk in his retirement income by coming to Webvan."
This is an outrage. The SEC and other regulatory agencies need to outlaw these types of practices. The shareholders are the ones being taken. How can Webvan or any company justify this retirement package after the CEO spent such a short time at the company? Correct me if I am wrong, but the company stock dropped drastically during Mr. Shaheen's tenure…
I need a job like this!
Not that I'd be happy about it if I were a Webvan shareholder, but ultimately, I guess it's the responsibility of the shareholder to know, research or at least *fear* for the possibility that an exec is going to get this kind of going-away prize.
If a $50 million windfall came out of the blue sky, without warning, without rational justification, to be divied up among the Webvan shareholders, would they turn it down?
It ain't pretty, but ultimately, I guess it's business. I'm unhappy that Carlos Perez is getting millions upon his release from the Dodgers, but no one forced the Dodgers to sign him to that contract.
Interesting that they are paying him, and it is due to his lack of foresight, that the company failed. Webvan has a great idea. Now, they need someone to execute on it. I would be happy to leave where I am now to help make them a success. I bet I could get some interest in the company and allow it to succeed and prosper. I would do it for $100,000 after taxes for the first year. 75k of that upfront to pay all expenses/bills/rent for the year, which would allow me to concentrate solely on the job of making the company profitable. Then, once it was profitable, merely a 50k raise to 150k per year, I will stay on for 3 years, and then they pay me a severance package of 1.5 million, plus 100,000 shares of stock, and the next guy comes in. Webvan, think seriously about that offer. The press alone would drive the interest in your company up. Rise in interest means a rise in customers and an interest in success. This can be achieved. I am ready when you are.
former APPLE CEO Candidate. Architect of Apple's rise to profitability
UNBELIEVABLE. Especially when the company's in such big trouble, closing down operations all over the country.
The only irony here is that the $375,000 is probably not enough to even make a dent in his inflated lifestyle. Probably not even enough to make the lease payments on his Rolls.
The truly appalling part is that this provision was actually included in his contract. Basically, without knowing if he would succeed or fail, they guaranteed him a huge salary for life ANYWAY.
I am curious, what happens if Webvan goes under? That is, no more Webvan, does the government have to pay him? I would not be surprised if that provision is buried somewhere in the fine print. What was the performance criteria for him? Obviously there was none. All he did was change his desk for a year. What a racket. The tragedy is that the average investor has no recourse for their AMT. Oh well, capitalism is all about the survival of the fittest.