The Minneapolis Star Tribune reports that 16 of Nash Finch’s top executives have been signed to retention contracts that give them between one and two year’s salary and benefits if they are fired by the new CEO hired to replace the departing Ron Marshall – thus giving them not to start sending out resumes.
Nash Finch told the US Securities and Exchange Commission (SEC) in a filing that the agreements were advisable “as a means of minimizing…risks and ensuring appropriate continuity of leadership” when Marshall leaves next March.
The question raised by analysts, according to the paper, is whether the contracts have been put into place to keep the executives in their jobs, or to simply create pre-arranged severance packages for aging executives inevitably going to be let go by a new CEO and who will have a hard time getting new jobs.
Nash Finch told the US Securities and Exchange Commission (SEC) in a filing that the agreements were advisable “as a means of minimizing…risks and ensuring appropriate continuity of leadership” when Marshall leaves next March.
The question raised by analysts, according to the paper, is whether the contracts have been put into place to keep the executives in their jobs, or to simply create pre-arranged severance packages for aging executives inevitably going to be let go by a new CEO and who will have a hard time getting new jobs.
- KC's View:
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If the company has so little confidence in its management team that it believes these executives will be replaced by a new CEO, one has to wonder about the company’s overall belief in its quality of leadership.
Our first instinct usually is to oppose these kinds of deals. But as someone who, if we worked for someone else, might actually fall into the category of “aging executive who will have a hard time getting another job,” we are sympathetic.
Which is, of course, why we do what we do.
