When I simultaneously read about the financial incentives paid to Vikram Pandit of Citicorp (including $118 million over 7 years), the spending excesses of, now departed, Merrill chief John Thain (hundreds of thousands of dollars to renovate his office, including $35,000 for a toilet) and the massive job losses across the country, I become a bit incensed. The wasteful and unchecked greed going on in the corner offices has always been an issue for me. However, it seems that in this new dawning of fiscal responsibility, the people who need to be taken to task for their historical and consistent greediness are not. Meanwhile, the folks who are merely doing their jobs are losing them.
Many people are amazed, shocked, and appalled to hear that John Thain spent hundreds of thousands of dollars to renovate his office. This is not where the shock factor is or needs to be.
I am quite confident this is not the first time Mr. Thain, or any other executive, has spent that kind of money. In the first place, what justifies that type of expenditure by any company on the behalf of any employee at any time? With the type of income he was making, let him pay for his ridiculous office opulence out of his own pocket and then write it off as a business expense. Shareholders are not investing in companies to have their executives live the good life on their investment dollar. Problem is, no one is watching the store on behalf of the shareholders.
What is even more appalling is that for every $100,000 dollars wasted by these executives, is a job that is going to be cut and a life that is going to be changed, possibly forever, because these executives were both greedy and irresponsible.
When a sports team has a lousy season, they do not fire the players. They fire the people in the head office and the coaching staff. In business, the team has a bad year and they fire the players. Businesses fire the people who are actually doing the real work. Imagine if a sports team fired their players for a bad season? How would the next game be played? In business, the game goes on, as long as people like Mr. Thain get their $35,000 dollar toilet, or Mr. Wagoner of GM fame keeps his job. Then times get tough and Congress can step in and give these companies a bailout, or “loan.” The executives responsible keep on with their incompetent ways while the workforce takes a hit.
A couple of ideas:
- Shareholders need to give their investments a reality check–stop investing for a while unless a company demonstrates real governance and actual responsibility with your money.
- Congress needs to give these inept and greedy execs the boot before they float them any money. Big advances to bad leaders is insane and irresponsible.
- Finally, how about a moratorium on job cuts? Let’s protect the worker for once. Unless, of course the job being cut is at the executive management level. In that case, it should be ‘game on’.
Here’s to better days and better business behaviors!