Let’s talk football for a moment. The American kind, not soccer.
Starting quarterbacks make millions of dollars per year to play a game. They make more per game than many Americans make in their careers, and their annual salaries would look like a lottery win to millions of people.
Now, let’s create a fictional quarterback, and call him Johnny Throwsaball (Johnny Football was taken). Johnny’s talented, won a lot of games at college, and has looked good in some limited playing time for his team. The starter is getting old, and the team has gone from 12 wins three years ago, to 10 winds the following season. Still playoff contenders, but clearly going in the wrong direction. Fans, and skybox ticket holders, were complaining.
The general manager gave Johnny the job last season, after paying off the previous QB. Johnny’s contract is laden with incentives.
In Johnny’s first season, the team slipped to nine wins, and missed the playoffs. There were flashes of brilliance though, and the team stayed with him. “Growing pains” was the response from the front office.
This season, the team slipped to seven twins, their first non-winning season in a decade. They faced their first non-sellout game in years as ticket sales declined, merchandise sales dropped, and overall revenue slipped. Jobs were cut, so that profits would be at an acceptable level. Some workers, like grounds crew and concessions, were transferred to another company and put on a contract, meaning they were costing the team less. Of course, they were also making less themselves. Community events were cut as well, meaning fewer players visiting sick kids in the hospital, etc.
Now, certainly, not all of this is Johny’s fault. But his inability to rally the team, to get his base job (winning games) done, is a huge contributing factor. The team turned over the reins to him, gave him plenty of talent to work with in his receivers and linemen, and made sure the entire team had support. And Johnny let them down.
So, what to do?
The team decided to honor all his incentives, paying him millions of dollars. Then they decided to buy out his contract, paying him millions more. “Just imagine how much worse it would have been without him,” came the release from the front office. “We needed him to guide us forward.”
Make sense? Happy with that decision? Shouldn’t the team have just cut him? If this were your team, would you be angry with the management? How many thousands of tickets and t-shirts went into paying off a player who was costing the team games?
Now, let’s make a few changes.
Instead of a football tram, let’s make make this a Fortune 500 company. And instead of a quarterback, let’s make Johnny a CEO.
One who, after perhaps just a few months with a company, walked away with millions after overseeing a decline in stock prices, closing factories or other locations, sending jobs overseas or just eliminating them altogether meaning families would have trouble making ends meet, selling off assets, and generally making things worse.
Welcome to American high finance in the 21st century.
If you aren’t as angry about this and you were over a football player, you’re part of the problem.