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The problem with "Golden Parachutes"

People walk past the entrance to the Time Warner center on August 7, 2013 in New York City.

Time Warner CEO Robert Marcus will get $80 million once his company’s sale to Comcast is finished.  Marcus was on the job for just six weeks, which makes this one of the most “golden” of “golden parachutes.”

Nancy Koehn is with the Harvard Business School. She said Golden Parachutes have been around for at least a generation of CEO compensation and they are important for keeping CEOs in the fold when changes of control happen.

Koehn said the idea of “Golden Parachutes” is up for debate.

“Data does not support that if you pay someone like Robert Marcus more than a million dollars a day, that necessarily Comcast and Time Warner shareholders are going be better off, than if you paid him something that most reasonable people including compensation experts and other CEOs would recognize as some kind reward for what he’s doing; helping shepherd the sale of the company."

Koehn said the $80 million Marcus is receiving reflects the overall bar in corporate America being raised in corporate America for the senior levels or corporations.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.

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