Hydro One CEO Gone...
In a move which certainly shocks me, the CEO of HydroOne is gone. As is the board. And apparently, he's walking away without fighting for his huge severance package which he was supposed to be entitled to.
I have NO clue what is going on here. It sounds too good to be true.
Sure, it was always possible that the Ford government could get rid of the CEO. The province was just 2% away from a controlling share in the company after all. But, the CEO also had a contract which guaranteed him millions in case of his termination. And buying back that stake would cost a lot of tax dollars and of course, the severance would likely cost consumers one way or another.
None of the reports mention the province buying back a controlling stake in the company. Nor does anything at all explain why the entire board would step down and the CEO would leave with a fraction of what he was contractually entitled to. Especially when, just a few weeks they were making comments about being unconcerned.
To put it in perspective, he is walking away from a $6+ million annual salary AND up to $10+ million in severance in exchange for... a $400k lump sum. That is LESS than ONE MONTH'S share of his salary alone.
I mean the math is pretty simple. 1/12 of $6 million is $500k.
If you got fired under similar situations, you would be entitled to a severance package. That severance package would be based upon your salary or historical pay for the last so many months or years. Had you been employed long enough, you'd likely be entitled to several weeks. More than a month's pay more than likely. This man, who was contractually obliged FAR MORE than that, just walked away with FAR LESS than that.
I'm no bleeding heart here. But, I'm trying to think of reasons which don't involve our provincial government bending or breaking laws here which would lead to this. And I'm not coming up with any.
However you may feel about this man or his grossly inflated salary... he has one or more houses. Same with cars. Those thing will require insurance, taxes and other monthly payments. He may have mortgaged houses (though, probably not with that kind of money, but who knows). He has a lifestyle, and that comes with a price tag as well. Given how the premier has painted a target on his back, he likely needs or feels the need for security, which is also expensive.
There is a simple financial truth; most people find a way make their lifestyle match their means. And any loss of income for any person or family generally results in pain.
This is why a man making 7 figures is unlikely to walk away from that job or leave without taking or fighting for his severance. Even if he tries to scale back his spending, he'll probably still be blowing through cash at a disgusting pace compared to you or I. Settling for less than a month's pay to walk away from a job with a salary he's unlikely to match ever again?
It just doesn't make sense.
And it makes even less sense for the entire board to leave with him. Sure, they are also to blame for the path the company took. But, companies will easily scape goat a CEO and continue along. That is what the huge severances are there for. "Be the face of the company, if something goes wrong we'll axe you an instant, but you can console yourself in this huge pile of money". And Ford COULD have walked away triumphant with just Schmidt being removed.
I don't know what to think aside from "this smells fishy".
[update]
Another thing I'm a little troubled about with Ford. And I hope people wake up to it. He seems VERY Toronto-centric. He is making a lot of demands specific to his hometown of Toronto, even when he acknowledges similar problems exist elsewhere. Such as demanding money specifically for the "immigration problems" in Toronto. It is almost as though, in his mind, Ontario consists of just 2 cities and the other, Ottawa, he is just flat in a war with.
[/update]
I have NO clue what is going on here. It sounds too good to be true.
Sure, it was always possible that the Ford government could get rid of the CEO. The province was just 2% away from a controlling share in the company after all. But, the CEO also had a contract which guaranteed him millions in case of his termination. And buying back that stake would cost a lot of tax dollars and of course, the severance would likely cost consumers one way or another.
None of the reports mention the province buying back a controlling stake in the company. Nor does anything at all explain why the entire board would step down and the CEO would leave with a fraction of what he was contractually entitled to. Especially when, just a few weeks they were making comments about being unconcerned.
To put it in perspective, he is walking away from a $6+ million annual salary AND up to $10+ million in severance in exchange for... a $400k lump sum. That is LESS than ONE MONTH'S share of his salary alone.
I mean the math is pretty simple. 1/12 of $6 million is $500k.
If you got fired under similar situations, you would be entitled to a severance package. That severance package would be based upon your salary or historical pay for the last so many months or years. Had you been employed long enough, you'd likely be entitled to several weeks. More than a month's pay more than likely. This man, who was contractually obliged FAR MORE than that, just walked away with FAR LESS than that.
I'm no bleeding heart here. But, I'm trying to think of reasons which don't involve our provincial government bending or breaking laws here which would lead to this. And I'm not coming up with any.
However you may feel about this man or his grossly inflated salary... he has one or more houses. Same with cars. Those thing will require insurance, taxes and other monthly payments. He may have mortgaged houses (though, probably not with that kind of money, but who knows). He has a lifestyle, and that comes with a price tag as well. Given how the premier has painted a target on his back, he likely needs or feels the need for security, which is also expensive.
There is a simple financial truth; most people find a way make their lifestyle match their means. And any loss of income for any person or family generally results in pain.
This is why a man making 7 figures is unlikely to walk away from that job or leave without taking or fighting for his severance. Even if he tries to scale back his spending, he'll probably still be blowing through cash at a disgusting pace compared to you or I. Settling for less than a month's pay to walk away from a job with a salary he's unlikely to match ever again?
It just doesn't make sense.
And it makes even less sense for the entire board to leave with him. Sure, they are also to blame for the path the company took. But, companies will easily scape goat a CEO and continue along. That is what the huge severances are there for. "Be the face of the company, if something goes wrong we'll axe you an instant, but you can console yourself in this huge pile of money". And Ford COULD have walked away triumphant with just Schmidt being removed.
I don't know what to think aside from "this smells fishy".
[update]
Another thing I'm a little troubled about with Ford. And I hope people wake up to it. He seems VERY Toronto-centric. He is making a lot of demands specific to his hometown of Toronto, even when he acknowledges similar problems exist elsewhere. Such as demanding money specifically for the "immigration problems" in Toronto. It is almost as though, in his mind, Ontario consists of just 2 cities and the other, Ottawa, he is just flat in a war with.
[/update]
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