Pointy haired bosses broke the code they provided on their site for embedding a Dilbert comic, so I removed the broken code.
Dogbert: “I am stepping down as CEO so I can spend more time with the money I stole from this hellhole.” Unfortunately we still have far too few people that see the obscene behavior of CEOs and their brooks brother bureaucrats as unacceptable. The behavior of many of them has been similar to that of dictators looting the coffers of their country as the country sinks into despair. The CEOs have their actions supported by a flock of board members that are also spared the condemnation their despicable behavior deserves.
I must say I am amazed at how brazenly those participating in looting companies from within are; and how it is accepted. It is a shame such unethical behavior is tolerated. It seems once companies implode their are some minor complaints about the behavior, in the specific case in question, as though it was not the accepted current practice among the many of those in positions of power (Warren Buffett being one obvious counterexample).
At some point I sure hope those looting companies and voting to support such things are seen for what they are. And I hope we don’t make excuses about how those taking what they didn’t deserve were somehow excused because they paid large sums of money to others to say such behavior was acceptable. Undermining all those that rely on a companies long term success is despicable behavior. That we accept those doing so and those board members supporting it as honorable members of society is a sad commentary on our society. I understand they feel entitled to loot when they see their neighbors buying castles around the world and helicopters and jets and… But their behavior is despicable.
Do you think the moral relativism that “it is ok to take what I don’t deserve, because these other CEO’s I know are doing the same thing”, will slow down sometime soon? Unfortunately there is little evidence that it will, even today.
The group of people looting want to say that the cultural norm is that looting is ok; because my neighbors are doing it and I paid off these respected members of society to sit on our board and vote that I could loot it. That probably makes the legal claim that it is looting difficult to prove. Just like I imagine it is difficult to prosecute a dictator looting their country (assuming they bother to make sure they adjust the laws to allow what they do instead of just deciding it isn’t worth the bother to do so). However, it does not make the behavior ethically acceptable. Though paying people well to support your looting does help make the case that the society supports it. It is a shame that support for corruption is bought so easily.
I have written about this many other times and said tilting at this windmill might not do any good, but I will continue to tilt at several such windmills in the hopes some good will come from it eventually. I am fully aware that it is unlikely to have any effect. And I can see that things are just getting even worse. I don’t know what else to do though, so I continue.
As I said in 2005 in Excessive Executive Pay:
- take huge risks to justify such pay and then go bankrupt when such risks fail (and some will succeed making it appear that they pay was deserved rather than just the random chance of taking a large risk and getting lucky).
- make it impossible to compete with companies that don’t allow such excesses and slowly go out of business to those companies that don’t act so irresponsibly
- hope that competitors adopt your bad practice of excessive pay (this does have potential as most people are corrupted by power, even across cultural boundaries). However, my expectation is the competitive forces of capitalism going forward are going to make such a hope unrealistic. People will see the opportunity provided by such poor management and compete with them.
As long as the pay packages were merely large, and didn’t effect the ability of a company to prosper, that practice could continue (slicing up the benefits between the stakeholders is not an exact science). The excesses recently have become so obscene as to become unsustainable.
The effects of a complete breakdown of any honorable behavior relating to executive looting is not difficult to foresee. If we don’t want to suffer from those consequences we have to stop the disastrous practice.
While some might not believe the mere act of ostracizing those that support such looting would be a powerful tool, I do. Obviously no one needs tens of millions of dollars they seek more cash as proof they are successful. The self interest of those looting is partially to have castles and the like but they also have huge egos and if they were treated the same way corrupt dictators or drug dealers were treated many would change. I don’t know but I don’t image the Metropolitan Museum of Art would name a wing after Robert Mugabe (no matter how much money he gave), I doubt MIT would name a school after Pablo Escobar…
We need to stop accepting despicable behavior from those “leading” large companies. It isn’t acceptable. We should stop treating those that are doing the looting and those that are supporting it as somehow respectable because they managed to get large bank accounts through that looting.
Failures of leadership: Tilting at Ludicrous CEO Pay – Unconscionable Executive Pay (post on WaMU March 2008) – CEO’s Given Lottery Sized Payouts – “Too often, executive compensation in the U.S. is ridiculously out of line with performance” Warren Buffett – No Excessive Senior Executive Pay at Toyota – Carl Icahn Sees Red Over Blockbuster Chief’s Pay – Exposing CEO Pay Excesses