Three prominent figures have had very public falls from grace in the last few months: Wells Fargo’s outgoing CEO John Stumpf, the Today Show’s Billy Bush, and Fox News’s Roger Ailes. These three men, aside from occupying positions of power in their respective fields, don’t appear to have much in common. What they do share, however, are large exit packages, despite the controversy over their departures. Stumpf stands to gain $130 million for his early retirement, which comes after revelations that Wells Fargo bankers were creating fake accounts to meet unrealistic quotas. Bush, who leaves the Today Show amid the scandal caused by a tape of Donald Trump bragging to him about sexual assault, will reportedly get $10 million for his early ouster. And Ailes, accused of sexually harassing Fox anchor Gretchen Carlson, received $40 million on his way out the door. In addition to these three, it is expected in the next few months, Yahoo’s CEO Marissa Mayer will join these three in gaining-by-leaving. When Verizon’s takeover of Yahoo is completed, Mayer stands to receive over $50 million, despite widespread agreement that her tenure as CEO was a failure.
These large exit payments are often referred to as “golden parachutes”—money paid to executives whose tenure is cut short, usually under less-than-ideal circumstances. The federal government is beginning to take notice of these severance windfalls, and is experimenting with options to curtail them. Some senators suggested that Wells Fargo should use its clawback provisions to prevent Stumpf’s gains. And last summer, the Financial Services Conflict of Interest Act was proposed to limit Wall Street bonuses for financial executives who left to take jobs in the federal government. No attempt has yet been made to regulate the practice more broadly.
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