If you’re like me, you just shake your head when you hear how Bernard Madoff perpetrated a 50 Billion dollar scam. This was just beyond reason since Madoff seems to have been an intelligent man, with financial expertise, well connected in the financial arena, and thus capable of making a lot of money legitimately.
So, those of us who didn’t have money deposited in any of Madoff’s phatom funds just shake our head, and eventually push this historic scam from our consciousness. But, whether you realize it or not, you’re likely being impacted right now by the greedy actions of certain greedy rich people who never go outside the law, but none the less greedily take more than their fair share.
Just because you’re rich it doesn’t always follow that you’re greedy. However, too many who are rich, are indeed greedy. As with Madoff, they have no regard for what is fair but take all they can get their hands on.
Let’s look at an example:
I’m no automotive expert, but I was vocal many years ago regarding the pitiful decisions American automotive executives were making going back decades. Pitiful decision which are significant to the current tough position the 3 big US car makers are in right now. Yet, all the while, these executives continued to draw unbelievable salaries. So why were we surprised in 2008 when the 3 Detroit car maker CEOs flew their private corporate jets to Washington DC (I am told at a cost of $20,000.00 per round trip for each CEO), to ask for government assistance? Their attitude is symptomatic of many American executives who consider themselves a sort of royalty entitled to live lavishly at their companies’ expense regardless of the state of their companies’ success or the shrinking compensation of the average worker at their companies. I have created a new word for these executives with this mentality: I call them the “Executocracy” .
The Executocracy I speak of are not those individuals who are highly paid because they have created some amazing invention through genius and hard work, and suffer through the rigor of bringing it to market. The Executocracy I speak of are not those individuals with large salaries as the result of years spent discovering and developing some ground breaking process that improves their company’s efficiency a hundredfold. The Executocracy I speak of are not those individuals who personally sweated and endured the founding of a company from scratch, funding the startup with their own hard earned money, building it into a successful enterprise and are thus due great wealth.
The executives I speak of are the Executocracy who raid the corporate coffers as a result of their ability to scale the corporate ladder and wield control of the board of directors who don’t have the guts to say “no” to unreasonable executive compensation packages.
Do you think I’m exaggerating?
Well, I have in front of me right now a CNN article that describes the retirement packages of CEOs that range from $100+ Million to $350+ Million.
A few of the items included in at least one of the afore mentioned retirement packages:
- thousands of dollars in annual automobile benefits
- thousand each year for home security
- use of the corporate jet (during retirement)
- tens of thousands of dollars to cover country club fees
For one of the companies represented above, the years prior to the CEO’s retirement involved the Executocracy carrying on systematic illegal underpayment of an entire class of its employees; reductions in the company’s support of employee health coverage, moving thousands of jobs off-shore to locations where the company could avoid paying a fair wage and avoid US labor laws, and other cost cutting strategies. But, I don’t think eliminating bloated CEO pay was ever on the cost cutting table.
So now you’re depressed, angry, or some other emotion. But, it’s not enough just to get angry. Let me give you at least two quick things I plan to do.
As it turns out, I have a few shares in one of the companies represented in the CNN article. Although these shares are in my retirement savings account, I still have the right to participate in stockholders’ meetings. I’ll be honest; in the past I didn’t really pay close attention like I should to the section of the Proxy Statement received by all stockholders that outlines all the compensation raked in by executives. But, from here on, I’m going to stay much more informed about the compensation given to executives of companies I have stock in.
Secondly, even though I may only own a hand full of shares in companies, I endeavor to participate, and vote consistently and faithfully as regards stockholder business even if I cannot afford to travel to the stockholder meetings personally.
And, who knows, at some point I may even through my hat in the ring and run for a board of directors seat on some company and offer some real challenge to the status quo.