Just a few days ago we wrote this about the University of California’s mishandling of an ethics case:

…former UC Provost M.R.C. Greenwood got a 15-month sabbatical collecting $300,000 per year plus a $100,000 research grant when she moves into her tenured professorship at UC Davis (which will pay another $163,800). As the Los Angeles Times which covered this in an editorial on the problems at UC, “we should all screw up [like this].”

It turns out if you are going to screw up, it is Mattel (Toys) where you want to do it.

According to the Los Angeles Times, Matthew Bousquette, the recently fired president of Mattel Brands, will get $5.4 million — three times his annual salary — as well as a consulting fee of $750,000 a year through the end of 2007. That’s right. Mattel chooses to fire him, presumably because he isn’t worth keeping him around but will then pay him everything in his contract anyway plus another $750,000 per year on top of that for his valuable advice. Doesn’t sound too smart–Mattel is paying him to go away and then paying him again to be around. It gets worse.

Despite getting almost $7m for doing nothing more than leaving the company Bousquette is also getting a host of perks including health benefits, outplacement services, financial counselling, tax preparation fees and country club fees. Should he at least be able to pay for his own golf? He even gets a company provided car (to drive to the golf course no doubt). The problem we have with all of this isn’t the salary or the perks or even the golf, it’s that he is getting all of these things having failed at his primary job. So much for aligning the interests of management with the stockholders. This is the part of corporate America that has to stop–paying for failure.

Mattel should know better. In 2000 they paid $50m for former CEO Jill Barad to leave so perhaps from their perspective they are getting off cheap.

This entry was posted on Friday, December 30th, 2005 at 10:48 am by Insider and is filed under How Not To Succeed In Business. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.