Golden handshakes, life jackets, and other golden goodies makes good business sense

People often get angry when an executive is given a huge sum of money when he/she is fired.  Even if he/she does not deserve it.  There is a very good reason for this.

Let us look at Coke for example.  If an executive who knows the company’s trade secrets is fired for doing something bad, he/she will receive a huge sum of money.  Furthermore, he/she will be required to sign a contract to never ever disclose the company’s trade secrets or work for any other company.  This huge sum of money may be more than 100 million dollars, but what other options does Coke have?  He/she is leaving with information that can destroy Coca Cola if disclosed.

Another example is Microsoft.  If a senior programmer, who is in charge of development of a new Windows version, leaves Microsoft because of hard economic times, he/she will also receive a golden handshake.  Furthermore, he/she will be required to never work for another computer company for X number of years.  The reason is he/she is in possession of sensitive information that can be damaging to Microsoft if it ever gets into the hands of a competitor.  Therefore, he/she may receive large monthly payments for X number of years.

So, if you hear in the news about a golden handshake or other golden stuff given to a former executive, think about what can happen if this was not done.  He/she can easily be recruited by a competitor and used as a pawn to destroy the former employer.

Unfortunately, golden handshakes and stuff will always be given.  Damage caused from leaked information may not be repairable.

In any case, I like golden stuff.  I only wish I could receive one.

Golden handshake and other stuff explained http://en.wikipedia.org/wiki/Golden_handshake

Apple hires IBM executive a violation http://news.zdnet.co.uk/hardware/0,1000000091,39563433,00.htm

Trade secret definition http://en.wikipedia.org/wiki/Trade_secret

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