For those CEOs that exit on their own terms rather than being pushed out, semi-retirement can be an extremely lucrative second career.Joanne Lublin at the Wall Street Journal finds that both the size and frequency of consulting contracts for former executives are increasing. For example, Samuel Palmisano, IBM’s outgoing CEO, will earn $20,000 for a four-hour day at the company.
Boeing’s ex-CEO Scott Carson earned $1.5 million over two years for no more than 75 hours a month. He never hit that maximum, and didn’t show for the last 6 months, but still received the full fee.
Most of these contracts don’t even require a minimum workload. A recent study found that only 7 of 174 recent agreements had such restrictions.
The story raises an interesting point. It’s one thing if the former exec is helping with a difficult transition and bringing long experience to bear on particularly thorny problems.
It’s another entirely if these fees are just a way to break up and hide large severance payments. If this is just a stealthy way to give executives a golden parachute and it’s essentially a no-show job, that’s a worrisome trend.
From a management perspective, there’s a chance that people will keep looking to the familiar figure for advice, blunting the power of the new chief and slowing down the succession.
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