Time & Attendance
By James Tehrani
Jun. 23, 2015
Hey, Elio, you seem to have done one hell-io of a good job.
Outside of lottery winners, not many people are paid $1.8 million for not even doing a day’s work.
It was announced on June 23 that Elio Leoni Sceti, the formerly soon-to-be CEO of beauty products company Coty Inc., will be paid close to a $2 million severance package. In terms of the C-suite that amount’s not newsworthy. The unusual part is that Sceti wasn’t even supposed to start working for the company until July 1.
In other words, he quit before he started and still got paid for it. Correction: Paid well for it.
Few people can truthfully post that status update without adding “LOL.”
So that’s $1.8 million for zero hours of work. Do the math; no, seriously, please do the math. As a literary-minded person, I can’t quite figure out this theoretical pay-rate equation.
The company also said it would buy back about $55,000 in preferred stock that Sceti had purchased, according to the Associated Press. The company’s interim CEO, Bart Brecht, will remain in that role until a new new CEO is brought in. You have to hand it to Sceti for negotiating such a favorable contract.
In a news release, Coty said: “We certainly understand Elio’s decision not to join Coty as planned, thank him for his professionalism throughout this process and we wish him all the best in his future endeavors.”
Thank him, not kick him? How polite.
Granted, we don’t know the specifics about why Sceti backed out of the job — if not the golden parachute.
There could be a legitimate reason we’re not privy to: health, family, etc. That said, if I’m the person who recruited Sceti, the former CEO of frozen-food company Iglo Group, I’m shaking in my boots and doing my best to avoid the icy glares coming from the board and C-suite.
This nonstarter tale speaks volumes to the importance of recruiting, especially for the C-suite. We all know that the economic costs of a bad hire are huge — perhaps not $1.8 million for most positions but still considerable. In a CareerBuilder survey from 2013, 27 percent of U.S. employers said a single bad hire cost the company more than $50,000.
What’s not as well-documented are the “other” factors of making a poor hiring decision.
According to a 2014 Robert Half International survey, 39 percent of HR professionals and hiring managers said a poor hire cost them productivity, and 35 percent said a poor hire affects team morale. Among chief financial officers 95 percent said a bad hire at least “somewhat” affects team morale.
No matter the situation, a change at the top can be nerve-wracking for employees, and if I’m a Coty marketing coordinator making about $53,000 per year — which, by the way, was roughly the median income of all U.S. households in 2013 — I’m not a happy camper to know that my former future CEO just made $1.8 million not to join the company.
While the Sceti situation might be an anomaly in the business world, it is still a great example of why good recruiting is so important.
But come to think of it, when Coty made the Sceti hiring announcement on April 20, the company’s stock was trading at about $25 a share on the New York Stock Exchange; today the stock is trading at about $31. Again, go ahead and check my math, but that’s about a 24 percent increase.
So maybe it wasn’t such a bad hire after all; perhaps Coty should throw in a gold Apple Watch, too, for a job well done.
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