Doing Well By Messing Up
This is a story about one baby boomer who's got no worries about retirement. Jill Barad just received a platinum parachute from Mattel, Inc., the world's largest toy company which lost millions last year -- on Barad's watch. Despite that, as CBS News Business Correspondent Anthony Mason reports, Barbie's former boss is making out like a bandit and making off with a bundle.
Barad was forced out as C.E.O. of Mattel in February, ending a three-year tenure that most agreed was, in the words -- or word -- of Nell Minow: "Catastrophic."
Minow, of The Corporate Library.com, says Barad's reign included mounting losses, a disastrous merger with The Learning Company and a stock price that over two years plummeted from $45 to $10. How much of it was Barad's fault? Well, says Minow, "She failed as a strategist. She failed as an operator. She failed as a manager."
But as a parting gift, Mattel's board will pay its ousted chief nearly $50 million -- including, according to a proxy filed Friday:
- $26 million in cash
- Forgiveness of a $3 million home loan
- Another $4 million loan
- Assumption of $3 million of Barad's tax liabilities
- Over $700,000 in annual benefits for life
Not that Barad is without accomplishment. A star who rose through the ranks at Mattel, Barad helped turn Barbie into a $2 billion global brand "I'm very proud to have been part of Barbie's life since 1981," she says.
Larry Haverty of State Street Research offers this analysis: "She was a great brand manager and marketing manager. And really a terrible CEO."
But Larry Haverty says Barad is paying with her credibility. "She's missing out, you know, on 15 years of power, glory and riches. I think she lost very badly," he maintains.
But Minow says the only losers are Mattel's shareholders. "This seems to be the new trend: Disposable CEO's," she suggests. "You pay them to come. You pay them to go"
Nice work if you can get it. What's a shareholder to do? How about suing? Well, Mattel is now the target of dozens of shareholder lawsuits.