Workplace Woes and St. Paul

It seems appropriate to end this tumultuous week with this post.  My recent post titled Boeing Workers Strike Back provoked a critical comment about my statement that one of the probable reasons for Boeing employees’ refusal to accept a pretty good offer was the CEO’s hefty 2007 compensation of $14.7 million.  The somewhat angry commenter said, among other things, “Ever see what a bad CEO can do to a company?”  After this kind of week, all of us would respond, “You’re darn tootin’ we have.”  

But let’s go back a couple of weeks to the Fannie Mae/Freddie Mac bailout.  What the commenter didn’t comment on is what happens to the bad CEO who runs a company into the ground.  The two CEOs of Fannie Mae and Freddie Mac are eligible for $24 million in severance, retirement benefits and deferred compensation.  Politicians are urging federal housing regulators to shred these golden parachutes, but I’m not sure that’s possible.  It may be a matter of contract.

The Fannie and Freddie situations aren’t atypical for bad CEOs.  Most CEOs of big companies get contracts up front which say that they’ll be paid millions of dollars a year while they’re serving as CEOs and then they’ll get millions of dollars when they leave.  The Fannie CEO has earned $12.4 million since 2004.  The Freddie CEO has earned $17.1 million since 2003. 

The commenter on my Boeing post added, “So . . . guys who make double the median wage in the US are jealous of the CEO who makes more than they do . . . . Nothing more than petty jealousy and envy.”  Well, yes indeed.  Let me be clear.  If someone out there will pay me the Boeing CEO’s comp of $14.7 million for one year or the Fannie or Freddie CEOs’ comp of what appears to be about $3 million for one year, I’ll work 18-20 hours a day, seven days a week.  And you won’t have to pay me any severance at the end of the year.  I’m pretty sure I can’t possibly cause any worse turmoil than what we’ve seen lately in multiple workplaces.

Until executive compensation is reined in to be reasonable, we’ll continue to have the meltdowns we’re seeing right now.  Today’s executives have no skin in the game.  They’re playing Monopoly.  They live on Park Place and Boardwalk.  They act like they’re using play money, but they receive real money.  Today’s regular employees become increasingly agitated (that’s a better word than jealous), causing more union activity, workplace disputes, and employment litigation.  Regular employees want some the big shots’ real money, one way or the other.

Which brings me to St. Paul, who wrote in I Timothy 6:10, “The love of money is the root of all evil.”  That sounds about right.

1. 

   E says:

   September 19, 2008 at 7:07 pm

   Great post John. E.
2. 

   John Phillips says:

   September 19, 2008 at 7:29 pm

   Thanks much.