It must be nice to be Rob Marcus, former CEO of Time Warner Cable (TWC).
His company’s ownership just transferred over to Charter Communications, and the sale means that after two years as CEO, Marcus is out of a job.
But don’t feel too sorry for him. He’s getting a generous parting gift — also known as a “golden parachute” — of $92 million in severance pay, reports Fortune.
What Did He Do to Earn $92 Million?
Marcus spent most of his time trying to finalize a mega-merger with Comcast that the government eventually blocked.
But he also worked to raise Time Warner’s stock prices, both in his previous role as COO and his most recent job as CEO. Since 2009, TWC’s stock value has increased by 800%.
While he’s hanging out at home figuring out his next move, Marcus will receive his severance over 24 months, and keep his health benefits, financial services and — yes, really — free cable.
Why Do CEOs Get Paid So Much to Leave Their Jobs?
Turns out, there’s a reason Marcus and other CEOs get paid millions to leave their posts: It’s a matter of saving face.
A golden parachute of millions of dollars is a company’s effort to make a graceful transition from one corporate leader to the next.
“It allows the CEO to go quietly into the dark night,” University of Pennsylvania Wharton School finance professor Luke Taylor explained to the school’s online business journal.
“If you are worried the CEO will sue the firm or work for a competitor, you can just pay the guy off.”
These payoffs aren’t always due to drama.
When Jack Welch retired as CEO of General Electric in 2001, he took home a $417 million severance package. After Procter & Gamble bought Gillette in 2005, Gillette CEO James Kilts stepped down and took home $153 million.
Ultimately, we don’t know what happens in the board rooms where these agreements get finalized.
All we know for sure is that we’d love to be CEO if it means a safety net like this on our way out.
Your Turn: What would you do with $92 million in severance?
Lisa Rowan is a writer, editor and podcaster living in Washington, D.C.