Dolly of a payout

By SELWYN PARKER

The massive compensation packages paid to failed American chief executives are making a mockery of performance-based remuneration.

Take the case of glamorous Jill Barad, fired as chief executive of Mattel, makers of the Barbie doll. Ms Barad had an employment contract that would have delivered her a not-inconsequential $US21 million ($45.6 million) if the board had let her stay on.

But it was El Dorado when she went. Her lawyers had negotiated into her separation contract a combo including five years' salary and bonuses (for what, you may ask) of $26.4 million. Ms Barad was also forgiven a $4.2 million personal loan and a $3 million home loan, even though she could have paid the debt and still banked more than US$19 million.

But the board thought they had not been sufficiently generous, so they also gave her $3.3 million to pay the taxes she owed on the forgiveness of her home loan.

Her lawyers also won the option for Ms Barad to buy all her office furniture for $1. Then, incredibly, she also got free financial counselling so - despite the fact she should presumably know a thing or two about managing money - she could learn how to handle all that boodle.

Simple subtraction shows Ms Barad was US$26 million better off for being fired than if she had stayed on.

Selwyn Parker is available at wordz@xtra.co.nz