Making money ever after…
I realize this might be a sensitive subject to some, but should a company that is already paying a hefty premium for a former executive’s life insurance (not to mention his wife’s) also fork over a death benefit when that executive dies?
Isn’t that what life insurance is all about? Last week, longtime Cablevision (CVC) executive John Tatta died. Tatta, who was considered a cable industry pioneer, retired from Cablevision back in 1992, but continued to collect $350K a year (plus around $50K in director’s fees) as a company consultant and board member. Last winter, his consulting contract was renewed for another three years and under the terms of the contract, Cablevision is required to make a lump sum death benefit to Tatta’s estate of around $350K, or 1/2 of the two years of consulting fees that remain under the contract. That’s on top of the $58,500 in premiums Cablevision paid in 2003 in life insurance premiums for Tatta and his wife. Now, I’m no expert on life insurance, but I’m pretty sure that $58,500 in premiums buys a pretty comprehensive policy. So why are Cablevision’s investors also paying for a death benefit too?