Former Office Depot CEO Steve Odland Pays SEC Fine, Collects Millions in Compensation and Other CEO Failures Who Serve On Corporate Boards

A Cautionary Note to Folks Who Want to Run Government Like a Business

The Wall Street Journal today has an informative story on a bad business practice.  No not the Op Ed piece that documents how despite all observations to the contrary the Administration’s bailout of the Auto Industry was poorly done and at a huge cost. (No Democrat success goes unpunished in the Editorial section of the WSJ).

The story is on how

Failed CEO’s Earn Huge Amounts on Corporate Boards.

The hero (?) of the story is former CEO of Staple Steve Odland who had to leave that company after paying a $50,000 fine for violation of SEC regulations.  Apparently embarrassed, Staples gave Mr. Odland only $11.2 million as a severance package.  General Mills was not a demanding as Staples, they kept Mr. Odland on their Board of Directors and last fiscal year he was paid $250,000 for that service.

The explanation

"It's part of the 'not giving up on your friends' kind of thing," says Eleanor Bloxham, president of Corporate Governance Alliance, a consulting company in Columbus, Ohio, that advises boards.

"Just because you failed as a CEO doesn't make you a bad director," says Charles Elson, director of the Weinberg Center for Corporate Governance at University of Delaware's business school. Mr. Elson serves on the board of HealthSouth Corp

Yes, just because you failed as a CEO that doesn’t make you a bad board member, maybe it even makes you a good board member.  Let’s take this even further.

Just because you failed as a bank robber doesn’t make you a bad bank branch manager.

Just because you failed as a Chef doesn’t make you a bad cook book author.

Just because you failed as a surgeon doesn’t make you a bad obstetrician. 

Well you get the picture.

Other great illustrations in the story are

Mary “Betsy” Burton, former CEO of Zale Corp. resigned after presiding over losses of both money and market share.  She got $907,000 in Board compensation from the aforementioned Staples.

Former Citigroup CEO Charles Prince,  resigned after his bank needed a $45 billion bailout from Uncle Sam, got $29.5 million in severance and another $667,000 in comp from serving on J&J’s Board

But the championship ring goes to Mr. Richard Syron, the former head of Freddie Mac.  His failure cost the U. S. taxpayers well over $100 billion.  He stayed on the Board of Genzyme and got $793,000 in Board pay.

Nice going people, you made money the old fashioned way, you used your connections to get rich.

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