Posts Tagged executive+compensation
Bonuses for bettors
Posted by redlinedoc in I never saw THAT coming on March 1, 2010
I’ve been quiet again. Probably feeling a deep recession myself, much more moral than fiscal but none the less, staying away from vocalizing what should be said.
I awoke to a story this morning about Jeffrey Skilling. His lawyers want to revisit the case so poor Jeffrey, who ruined the lives not only of stockholders, but his fellow employees by lying and taking their monies would be set free. But I digress.
I work in Hartford, now ranked the third poorest city of its size in the nation. Once it had a thriving downtown and people worked at department stores, in the pre-mall days, with names like G Fox and Company or Brown-Thompson and more. They probably never made much more than minimum wage but worked hard, many of them for 30 years or more and retired with small social security benefits but with a retirement plan that allowed them some leeway to visit grandchildren, keep an apartment or house and generally live a decent retired lifestyle. No high rollers here, just decent hardworking folks.
I spoke to one the other day, now on the verge of losing her house because she can’t make the tax payments. How? Well Jeffrey Skilling’s friends at Morgan Stanley and Lehman Brothers (and many others) took her monies to the racetrack, bet the monies on derrivatives (a fancy name for casino in the stock world). So long as everyone was making 100% returns (you do see where this is going) everyone was happy. Then the day came when someone looked and (((GASP!!!))) the emperor was naked. The whole house of cards fell and with it the retirements and savings of the folks in the North End of Hartford and elsewhere. Oh well. Not to despair. We’re so good (the Skilling-ites replied) that we need bonuses to make sure that we retain all these fine young minds. And so they did. We the people bonused the bettors. If they’d done this at a OTB window they could not have done a better job.
What of my lady in the North End. She, who worked all her life gets to go on assistance. She spoke with me with tears in her eyes. She’d never taken anything from anyone and now she was forced to accept this.
I’m not the blood thirsty sort; however, I have visions of letting Jeffrey or his ilk, loose in a field with some of the folks they fleeced. Heads on pikes. It might slow the cascade of betting other peoples monies. It might bring some cold comfort to those without heat or shelter because they lent trust and were returned fiduciary irresponsibility.
I spoke with a 401K counselor recently about all this stealing. He of course in his snow-cones-salesman’s way assured me that this could never happen to mutual funds? Huh?
Somewhere out there I recall that fiduciary meant fiscally responsible. If we bonus these people perhaps they should pay (directly) some of those millions to those they fleeced. An idea but hardly likely to fly. Nope. Heads on pikes I think.
Moments of madness
Posted by redlinedoc in Commentary of the times on July 13, 2009
I was driving home this evening listening to the discussion about why the financial institutions are putting out the same hybrid products that brought us this wonderful recession, hearing the pundits explain that it brings capital into the markets and although its a bit (a bit?) risky, these instruments help to drive the market. Ok. I’m no financial whiz but didn’t we just loan billions and trillions of dollars to these self serving financial institutions to NOT have them bet the store? Wasn’t part of the project to make them more fiscally responsible? Somehow we the poor schmoes who pay taxes are subsidizing a very wealthy gambling habit. We’re bound to lose. We may be the house but in this case we hold none of the trump cards.
Trump cards? Isn’t this banking? Isn’t this where the banker sits across the table and says “Well Joe, opening a restaurant is a risky business and we’ll need some collateral” — or so it was in the past. Now we have bankers betting (your house) on 10:1 or 100:1 odds knowing that the worst will be that the government will for a time be paying into their bank. Where are their ethics.
Ahh ethics. It seems that capitalism trumps ethics. Do undo others before they do unto you. The Ivory Tower at Havard spoke several weeks ago about plans to include teaching ethics to the business school. Its the piper teaching the cobra. Once the cobra leaves the nest, well then its just a bunch of snakes isn’t it?
It wasn’t until the sentencing the other week that I got it. Bernie Madoff…. made off with our monies. Too sweet. such onomatopoeia. No one saw the deal too good to be true, 30:1 winnings? Get real folks. Its all about the casino, and we the taxpayer have been at the largest gaming table ever, Bernie and his friends (and there are more no doubt) are pikers compared to the banks and so called financial houses that take our monies and throw it on the international craps table. Oh lost a few billion in that scheme. Not to worry Uncle will back you. . . .and he has.
Heads on pikes
Posted by redlinedoc in Commentary of the times on June 22, 2009
It seems its a day of good news bad news. The good news seems to be that the boys at Goldman Sachs are snuffling at the trough and ready to suck up those great well deserved bonuses for having put us in the worst recession since the 30′s perhaps worse than that. I fear that we missed an opportunity for heads on pikes. I’m not ordinarily a gory sort of fellow; however, if a few of those egregious folk had their heads up along the boulevard perhaps fewer of these guys would be snorting at the trough so soon. Its a sign that regularion has lost and that we as a nation have or will loose big time now that the game is a foot and the money is liberally flying around again.
It makes me wonder in some ways what the big call is for CEO’s. I hear one company after another looking for the most expensive CEO guy they can find. I have no problem paying for success. Its the paying for the failures. United Airlines, General Motors, Chrysler, Hewlett Packard — each of those men and women walked away handsomely endowed with bonus and super bonus and stock options. As each of these companies tanked and drew down the economy we threw MORE money at CEO’s. I’ve yet to see cat skeleton’s around full cat food bowls. I believe if we all went to reasonable executive pay and said NO MORE! that indeed CEO’s would be paid proprionately and reasonably. Perhaps we should make the CEO take some of the risk (not with fako securities from the board but with his own monies. Perhaps, as in days of yore, CEO’s should bear a percentage of risk and win-lose with the company.
Danny DeVito, ever a mirror for the times, did it well with ‘Other People’s Money’.
The Harvard business school recently announced that they might teach business ethics to their grads. What a concept! Such things as stealing from old ladies is wrong, wiping out the life savings of people and towns is poor for future business, and the future. My son said that if once in a while if the inchoate mob, those who lost nearly everything, had an opportunity to be in a closed area with the hedgies and mutualaholics who ground their savings from real to immaginary numbers that much of this would be object lesson.
But then, that’s pretty gory.
Heads on pikes. Not a lot. Just a few. Some in Wall Street. Some on K Street. Some along the mall. Sobers the crowd and makes us remember that there really are people who are responsible. Until then, its still “Buddy can you spare a (discounted) dime.”
Let them eat cruisers …
Posted by redlinedoc in I never saw THAT coming on April 21, 2010
The big boys at Chrysler appear to have taken the pipe, 4 BILLION (with a ‘B’ folks) in losses since exiting bankrupty! I doubt that will stop the executive piggies from snorting at the money trough in the name of needing to pay the best and brightest.
We need to remind ourselves that the Mouth of Sauron himself, the Chrysler damage control guy, at meetings this past year said “Oh .. we put a bad engine in that car — but — (pregnant pause and I presume a wolfish smile), we don’t make them anymore.” Not making one of the mechanically lousiest cars on the road is scarcely a strategy designed to win hearts and minds of Americans.
The car had a sluggish start. It was very retro, very cute, very flawed. The power train with an automatic could scarcely get the car out of its own way. Add a turbo and stickshift and it did go. Fixing the cars, it was my mechanic’s nightmare, was another thing. It would appear that the engine had been dropped into the car without regard for access. After all what fool would want to fix this? Access to the engine required removing the right side of the car and all the steering gear there. The engine mounts blocked access to such non critical parts as the timing belt adjustment.
I attended school at UCONN (University of Connecticut) which at the time had one of the finest civil and mechanical engineering departments in the country. I have friends from MIT, CALTECH, CASE to name but a few. They seem pretty competent. Is it possible there’s a large vacuum at Chrysler which sucks the smarts out of the engineering staff, followed closely by the moral vacuum which removes all traces of morality. I have long thought that American ingenuity can solve most problems. The difficulty is that American greed removes the problem solving substituting marketing glitz, full of sound and fury, signifying, nothing.
business+ethics, CEO, Chrysler, ethics, executive+compensation, other+peoples+money, Sauron
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