5 % for life!

anotherlife

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Many CEO contracts especially from the 1990s contained a life long golden parachute, specifying that x % of the company's earnings goes to the CEO for life every year. After he stops being a CEO.

How can a company fight this when it is in effect? Does the company have to go into some sort of a bankruptcy to get rid of this drag?
 

jackflash

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Many CEO contracts especially from the 1990s contained a life long golden parachute, specifying that x % of the company's earnings goes to the CEO for life every year. After he stops being a CEO.

How can a company fight this when it is in effect? Does the company have to go into some sort of a bankruptcy to get rid of this drag?
Contract law is like most any law, if the $$$$$ is available the attorney$ to change the law are available al$o.
 

shockedcanadian

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Many CEO contracts especially from the 1990s contained a life long golden parachute, specifying that x % of the company's earnings goes to the CEO for life every year. After he stops being a CEO.

How can a company fight this when it is in effect? Does the company have to go into some sort of a bankruptcy to get rid of this drag?
I'm no lawyer but I have to imagine that if it is publicly traded that shareholders could have a class action suit, either against those who allowed this to go through, or, the former CEO themselves. Seems like an unfair burden passed on to others.

At the very least, I imagine they could try to fight to make it null and void through courts, or have it driven down to 5% of the max revenue they experienced during his tenure and not the current 5% of revenue. Or, even on the grounds of unfair burden being placed on the company today that could jeopardize their ability to remain competitive signed by people no longer with the company.

I've never heard of such a contract by someone who is no longer an employee. Maybe shared released on a schedule for a couple of years, but 5% revenue for life? That's something.
 

Toddsterpatriot

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Many CEO contracts especially from the 1990s contained a life long golden parachute, specifying that x % of the company's earnings goes to the CEO for life every year. After he stops being a CEO.

How can a company fight this when it is in effect? Does the company have to go into some sort of a bankruptcy to get rid of this drag?
Many CEO contracts especially from the 1990s contained a life long golden parachute, specifying that x % of the company's earnings goes to the CEO for life every year. After he stops being a CEO.

Link?
 

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