Fat Cat

What Is a Fat Cat?

The term "fat cat" is a shoptalk description of executives who earn what many accept to be nonsensically high salaries and bonuses. These top executives likewise receive liberal pensions and retirement bundles comprising of extra compensation not accessible to other company employees.

Understanding the Fat Cat

The term "fat cat" evokes the picture of cats that consume in excess of a fitting amount of food and become terribly overweight.

Publicly-exchanged companies are required to unveil the amount of compensation that their best five executives receive. Subsequently, companies have been under serious examination for excessive executive compensation, particularly in the face of flopping incomes. Fat cats are frequently viewed as having huge amounts of capital at their personal disposal. Notwithstanding any executive position or board enrollments the individual might hold, a fat cat may likewise have significant influence in social, community, political, and business networks.

How a Fat Cat Leverages Influence

The assumption is that fat cats have a proven understanding of how to create wealth on a substantial scale and that their feedback is accepted to produce lucrative outcomes.

For instance, a fat cat might have earned a sizable payout from a lucrative venture, for example, the sale of a company they helped found or fill before in their career. Alongside the cash from the deal, the individual might have developed clout and an extensive reputation among their friends. The influence and leverage a fat cat could apply can stem from tangible activities, for example, turning into an investor in beginning phase companies and startups.

Fat cats could lay out organizations, funds, or different platforms that permit them to actively leverage their wealth to support some undertaking. Political missions could look for the support of fat cats for their access to capital for funding and for the influence they can apply with other possible givers and citizens.

A fat cat could likewise broker business deals and arrangements through the associations they have developed. This influence might actually be utilized to influence activity in a market or industry in which the fat cat has a sizable stake. The utilization of such influence could bring up issues of ethics and legitimateness, contingent upon the moves a fat cat makes. For instance, in the event that a fat cat were to utilize their influence to propel providers to avoid business with a rival to force them out of business, such activities could draw the consideration of regulators.

Instances of Fat Cats

A genuine illustration of a fat cat would be former Disney (DIS) CEO, Michael Eisner. For a period of five years in the late 1990s, Eisner received more than $737 million in compensation, notwithstanding the way that the company's five-year net income shrank by an average of 3.1% every year.

In 2017, Hock Tan at Broadcom Inc. (AVGO) made $103.2 million, a year the stock was up over 40%.

Likewise in 2017, W. Nicholas Howley at TransDigm Group Inc. (TDG) made $61 million, a year when the stock defeated somewhat more than 8% gain.

Elon Musk is one more outstanding illustration of a fat cat, positioning as the highest-paid tech CEO, rounding up a bewildering $595.3 million in pay for 2020, regardless of Tesla's almost $1 billion loss for fiscal year 2019.

Highlights

• In spite of being reprimanded by the public on occasion, "fat cats" frequently have a large amount of influence due to their spending power and ability to give to political causes and up-and-comers.
• Instances of "fat cats" incorporate magnates and looter noblemen of the past, yet additionally contemporary CEOs and corporate directors.
• A "fat cat" is shoptalk for a wealthy executive who extravagantly accumulates excess wealth past what ordinary individuals view as fair compensation.