Huge amounts of money flowing to executives
Title: Readers rage over worst CEOs -- their bosses
Date: June 16, 2004
From the article:
- In response to my request for nominations for the worst U.S. chief executives (see “The nation’s worst CEOs” ), I received nearly 1,000 emails -- many seething with resentment and disappointment about the shabby ways many top executives lead their firms, treat workers, handle shareholders and compensate themselves like a royalty class with little regard to business performance.
- "The board of Fog Cutter announced in a regulatory filing last week that the company would continue to pay Wiederhorn’s full salary during his 18 months in prison as well as a $2 million “leave of absence” payment that equals the amount he agreed to pay in restitution to victims."
- "What Joe Nacchio did to the company and stock price under his helm (down 95%) is amazing. I know several people that this has affected. Deaths. Divorce. Engineers that are now janitors. Nacchio was rewarded for his performance with $150 million parting gift."
- "Burroughs, like many SBC managers who wrote in, complained that they were asked to train and fill in for union employees during a recent strike, but not compensated for the extra work -- and ended up taking pay cuts and health-insurance cuts that were worse than what the union workers received. Meanwhile, workers complained that Whitacre and his management crew voted themselves bigger pay packages."
- “CEO compensation is the single most important factor in competitiveness of U.S. corporations. It destroys the worker morale as average employees are told their pay, their health care and their pension are too expensive for the company to deal with; yet the executive compensation continues to sky rocket. Last week, G. Richard Wagoner, the CEO at General Motors, complained that ‘Soaring health care costs are crippling the competitiveness of U.S. companies.’ . . . Meanwhile, he received a 2003 compensation package valued at $12.8 million."
- "One target was Philip Marineau of jeans-maker Levi Strauss & Co., which in March reported a fourth-quarter loss of $245 million after sales dropped for a seventh straight year. The company, which issues debt but not stock, also restated results to cut net income from 2001 through the first half of 2003. A recent filing showed Marineau received about $27 million in compensation over the past three years despite his hand in eroding stakeholder value."
When capitalism is working properly, competition wrings out the greed and corruption we are seeing today. The goal of large corporations is to eliminate competition. Why is Microsoft sitting on $56 billion in cash ($560 per American household!) and crippling innovation in America's software industry? Because Microsoft is in a monopoly position and capitalism is not working in the software industry. Why are drug prices so high? Because drug companies hold monopoly positions in the drugs they sell, and they also have so much money that the have purchased politicians. Instead of looking at the interests of everyday workers and consumers, the U.S. governement has aligned itself with the wealthy and now actively encourages the concentration of wealth.