I've written a fair bit about the compensation of those who run America's large companies. These 'leaders' of the corporate world make more than a decent buck in cash, stock, and perquisites no matter how their companies fare. Gretchen Morgenson in today's NY Times points out that these benefits can also be made even when a company is in bankruptcy.
Her example is Delphi Corporation, the parts business spinoff by GM. Here's a company that has lost more than $6 billion dollars in the past two years, even though it has under-funded its pension plan by $11 billion (that you and I will pick up as taxpayers since the plan will go to the PBGC). Yet, it intends to compensate most of those who have managed the company so poorly with hundreds of millions of dollars should the company make it out of bankruptcy or manage to sell its assets, while at the same time it proposes to cut its employees' pay by two-thirds and screw its retireees.
One particular aspect of the compensation plan filed with the bankruptcy court caught my attention - incentive bonuses. These are calculated not on net earnings, but on earnings less interest, taxes, depreciation, amortization and restructuring costs. I've always had a problem with definitions of earnings that don't include all of a company's costs, including interest, taxes and depreciation, but the exclusion of restructuring costs in a situation crying for restructuring boggles the mind. They can spend whatever they want to restructure and pay no penalty for doing so. If the incentive bonuses are earned, they will amount to $21.5 million in the first six months. Toyota, not exactly a loser in the auto world, pays its top thirty-three executives the same amount for a full year.
There's a lot more of this robbery going on but I'm too p.oed. to go on. Where have notions of morality, decency, fairness gone?
1 comment:
Al - they've all been swallowed up by the great dinosaur we call corporate greed. There was a time when firms took pride in caring for their workers and protecting the good company name. Now, that's all gone and what matters is those at the top raking in as much as they can, while they can. Workers are just pawns, and let's face it, how many trustworthy company names are there left in the marketplace?
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