Come On…This is Ridiculous…Make the CEOs Pay it Back
Not all performance problems are training related. We learning and development professionals can’t save the world if the world doesn’t want to be saved. Normally, I do not blog about political or economic matters but the debacle on Wall street is forcing my hand.
Let’s start with some figures from a Money Magazine commentary called Blame boards of directors for financial mess
Former Merrill Lynch CEO Stanley O’Neal received total compensation of more than $91 million for 2006. O’Neal received more than $160 million in stock and retirement benefits while shareholders lost more than 41 percent of their investment value over the year. Three executives brought in to Merrill less than a year ago will share a $200 million payment as they turn over the company to Bank of America in a last-minute deal to help it survive.
American International Group (AIG) replaced CEO Martin Sullivan after the company posted losses for two consecutive quarters totaling $13 billion. Sullivan’s contract entitled him to about $68 million. His replacement, a board member who served as CEO for three months before the company was taken over by the government, will get as much as $7 million.
The replacement Bob Willumstad, 63, is entitled to keep a $4 million cash bonus, 1 million shares, six months’ severance salary and life insurance and other benefits.
In another article by Money, they reported that Washington Mutual’s Kerry Killinger will retire with $5.2 million in common stock, $14.9 million in deferred compensation and $3.5 million in pension benefits. As you may or may not know Washington Mutual is on the “short list” of might-be-getting-a-bail-out financial institutions.
Now, let’s say your are an employee within a financial company and you see the excess and greed that oozes from these organizations, how can you take any type of ethics training, compliance training or any training not focused on making you more money seriously.
In fact, there is no downside for these CEOs not to “work the system.” The entire subprime mess and credit bubble is based on financial assumptions that you won’t tolerate from your 2 year old (like property values will go up forever or that people who couldn’t qualify for regular mortage could always make payments on special mortage products.)
Now the government who taxes me and you without mercy is asking us to pay to bail out millionaires…disgusting. If I don’t pay the people to whom I owe money because of my past bad decisions, I am still accountable. If a CEO cheats the system and threatens to bankrupt the United States, he gets a few million dollars and is told to retire.
That attitude trickles down to all levels of the organization. Now, how are we supposed to create training for ethics and compliance. How do we expect salesfolks to be ethical while the CEOs are anything but? In fact, it is getting more and more difficult to find anyone in a position of power who is ethical. From professional sports to presidential VP candidates who refuse to cooperate with investigations or presidents who look us in the eye and tell us “it depends on the definition of the word ‘is’. You have to be kidding me.
I’ve got few answers about teaching ethics to the unethical, just some frustration. Although, I have written about this before:
Conspiracy Theory: Teaching Ethics
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Could not agree more…
The CEOs all say that they are worth the money because they sometimes have to work 32 hours a day, eight days a week. Nevermind the worker that recieved no raise this year. The CEOs do not have a vested interest in the company, but themselves. I think the national debt has passed to my unborn grandchildren now.
Some definitions of value are outdated due to the unbridled greed at executive level. Millions – its closer to billions, Compensation – do you mean legalized robbery, performance – legal excuse is more appropriate. Some of these money managers are literally making billionaires of themselves through annual payouts. Shareholders such as banks and pension funds are equally to blame for pumping money into such corporations. Fortune magazine had an article of some hedge fund manager where the unbridled greed was in the form of taking 50% of all profits made yearly. This guy had an annual payout of over a billion dollars. That is one reason why shareholders should not be bailed out by taxpayers.
The fact that there is no accountability or confiscation of such fantasy payouts, after nearly bringing down the whole global economy, tells me that the whole system will eventually come crashing down.