Zero Hedge
All posts from Zero Hedge
Zero Hedge in Zero Hedge,

Crime Pays In America: United CEO Exits With $21M Package Despite Corruption Probe

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

Crime and corruption pay in America; you just have to be a corporate CEO, Wall Street executive, senior member of the military-industrial-intelligence complex or a politician. These so-called “elites” have perverted American justice to such a degree that not only are they now entirely above the law, they’re actually rewarded for unethical and crony behavior even after they get caught.

Nothing sums up how completely fraudulent and corrupt the U.S. economy has become than the following story, which describes how the United Airlines CEO who stepped down in the midst of a corruption probe is rewarded with a $21 million exit package, “free flights for life,” and free parking in downtown Chicago forever. No, I’m not making this up.

From the Omaha World-Herald:

When Jeff Smisek stepped down as United Airlines’ chief executive last week amid a federal corruption probe, he didn’t walk away empty-handed. He will receive at least $21 million in cash and stock, fly free for the rest of his life and keep his company car.


Then there is the parking.


He can park free in downtown Chicago and at airports in Houston and Chicago for the rest of his life.


The full value of Smisek’s exit package could be even higher — he’s still eligible for the incentive pay that accumulated before his resignation. In all, Bloomberg estimates he will walk away with $28.6 million. That’s more than double his pay last year, which reached $12.8 million.


Smisek’s resignation was tied to a federal investigation into whether the air carrier launched a money-losing flight from Newark, New Jersey, to Columbia, South Carolina, to benefit the influential then-chairman of the Port Authority of New York and New Jersey, who owned a vacation home near Columbia.


Smisek’s tenure was also pockmarked by technical glitches that briefly grounded United’s fleet this year, and a difficult merger with Continental.

You see, he wasn’t just rewarded for corruption, he was incompetent too.

“This is very, very typical,” said Charles Elson, chairman of the University of Delaware’s Weinberg Center for Corporate Governance.


Less typical: Smisek’s non-cash compensation, including the company car, health insurance and the lifetime of free flights (and companion tickets), compensation experts say. United is even picking up the tax bill for the free flights, which the company has estimated could come to more than $437,000.


“From the worker’s perspective, it’s obviously a different mentality,” said Molly Sheerer, a spokeswoman for the union, which is in the midst of contract negotiations with the airline. “We believe there’s something wrong when an executive is awarded over $25 million for failing to do his job.”

Now here’s the real kicker…

“The way that CEO employment agreements are written, you really have to commit a felony before they can fire you and not pay you anything,” said Paul Hodgson, a partner at BHJ Partners, a compensation research firm. “Just being bad at your job or immoral or unethical or whatever is not enough usually.”

Heads I win, tails you lose.

Just another day in the imperial Banana Republic.