Repeat offenders? Or, just unlucky.
Why is a multiple even the consideration? If a CEO's decisions are responsible for creating wealth (for shareholders) why shouldn't he get part of the pie? But, what if he is just lucky? Or what if he destroys value?
In the lucky case, then outrageous compensation packages are silly decisions of the board of directors not understanding their own business. IN the destroys value case, the CEO might just be unable to manage his charges to success.
Take, for example, the case of Mark Hoffman, the fired CEO of Corporate Express. After presiding over the destruction of hundreds of millions in shareholder value, he received a golden parachute. But, the odd part, is that Corporate Express investors had already overlooked his frailties -- before joining, he presided over the walk up to bankruptcy of APS in Houston.
Boards need to do a "bad CEO" check just as they do credit checks on new employees -- it is inexplicable how they let poor quality people repeat their destruction time after time.
