Time and again, we see CEOs and similar executives make horrible decisions that massively damage a company both financially and in terms of reputation and the perpetrator is forced to resign, yet receives so much money as a going away present you’d think they’re being rewarded for their fuck up. Why??
Not only that, but that parachute comes with… well… strings attached. (Sorry.)
Most CEOs have a high-level understanding of a companies long-term strategic plan, which would be very valuable to competitors. That payout is probably tied to an iron-clad NDA and non-compete clause. While non-compete clauses get a lot of bad press when peons are forced to sign them, for executives they make total sense, especially when directly tied to a payout, which can be clawed back if there is chicanery.
If an executive is bad enough, paying them to not work anywhere for a few years may be less risky than firing themand risking them blabbing to th3 competition.