Most boards of directors approve of such deals for disgraced CEOs on their way out, because they are usually honoring what was negotiated at the beginning prior to the CEO taking the job. It's no different from a baseball player making 25 million a year to fail 8 out 10 times on average and hit 15 homeruns out of nearly 700 plate appearances. A deal is a deal, and when it comes to CEO's such agreements are negotiated to promote CEO actions that are in the best interest of the firm and to recruit executives who are most capable of achieving desired results. Poor corporate governance may play a role in the granting of some dubious severance packages. However, as pay-disclosure rules mandated by the SEC have become stricter and the public has become more aware of the extent of executive compensation, corporate boards have begun to offer less extravagant pay packages. Within this environment, perquisites have disappeared quickly while severance pay appears to have remained, suggesting that there is a place for it within an executive’s compensation agreement. In addition, research suggests little association between the presence of ex-ante severance agreements and yardsticks commonly used to measure executive board strength, such as the fraction of outside directors, or whether an executive board staggers the elections of its board members. Furthermore, the reasons why a potential CEO negotiating from a strong position would focus negotiations upon severance pay instead of more immediate compensation are unclear. Rather, the research supports three motivations behind executive severance agreements: to encourage risk-taking, to provide job insurance, and to compensate CEOs in the instance of confidentiality requirements. While the question of whether or not CEO severance packages are excessive will certainly remain controversial, it is clear that the existence of