At Last, Remorse — from Switzerland

Have you heard any of the U.S. executives involved in the our economic meltdown express remorse for their part in this fiasco? If you have, let me know, because I haven’t. In fact, the companies being bailed out have resisted pressure to cut executive compensation, raises, and bonuses. Breaking up with capitalism is obviously going to be hard to do.

We have to go to Switzerland, where capitalism has never exactly been the One True God as it has been on this side of the Atlantic, to learn about what’s unheard of in America. According to the New York Times, three former officials of the troubled Swiss financial institution, UBS, have agreed to forgo over $27 million in compensation to which they are entitled. UBS, a recipient of bailout support from the Swiss government, recently reported a stunning $50 billion in losses.

There’s been talk in the U.S. of trying to get back money already in the pockets of executives who oversaw the reckless business operations leading to the current crisis, but that’s easier said than done from a legal perspective. In Switzerland, the former UBS executives did it voluntarily, expressing remorse for what had happened, though not admitting guilt “in a legal sense.”

Executives often hide behind the law when they refuse to say they’re sorry and return tainted money. If they did, they say, they’d be sued. If the executives who’ve been intimately involved with the financial collapse in this country have legal liability for this mess, they’ll be sued anyway. And they’ll need plenty of money to defend themselves.

Contrast the UBS executives’ attitude with that of Robert Rubin, former Secretary of the Treasury, former co-chairman of Goldman Sachs, and presently senior counselor and director of Citigroup. According to the Wall Street Journal, even though Rubin is one of Citi’s highest paid executives ($115 million since 1999, excluding stock options) and even though he was directly involved with Citi’s decision to take more risks to keep up with its competitors, Rubin now says his role was peripheral to Citi’s main operations. He says his pay was justified, noting that he had higher-paying opportunities in other places (places no doubt counting their lucky stars at this point). When asked if he had regret about Citi’s plight ($20 billion in losses during the last year and a $45 billion bailout from the feds), he said he didn’t look at it that way. Rather, the whole financial crisis provided learning opportunities. Indeed.

One of the long-used corporate buzzwords is accountability. Executives delight in crowing about holding their people accountable or complaining about a culture that doesn’t recognize accountability or encouraging supervisors and managers to fire employees when they’re not being accountable. It’ll be a long time before employees take the big dogs seriously again about accountability.

And until executives learn to say I’m sorry or I don’t deserve the millions I’ve been paid, employees shouldn’t pay any attention to them — about accountability or anything else.

1. 

   LKS says:

   December 3, 2008 at 2:15 pm

   These executives will never admit they didn’t deserve the money they were paid. If they felt they didn’t deserve it – they wouldn’t have taken it to begin with!

   Accountability is a word that applies only to the mere mortals who work for these companies, not the big dogs!
2. 

   ACU Frank says:

   December 3, 2008 at 4:21 pm

   It took them 60+ years to apologize for helping the Nazis hide the wealth stolen from murdered Jews. It sounds like they’re on a guilt-ridden roll…
3. 

   John Phillips says:

   December 3, 2008 at 7:35 pm

   LKS and ACU Frank,

   Two of my favorite commenters. Thanks as always.

   OK, LKS, tell us what you really think. I’m afraid you are 100% correct.

   And, Frank, always looking at the matter at hand from a quite different perspective.

   At this particular point in time, it’s easier to be harder on the Americans than the Swiss.

   Thanks to both of you for weighing in.

   John
4. 

   Cultural Offering says:

   December 3, 2008 at 11:14 pm

   A wonderful post that I will be putting up at my site tomorrow. Must read. I watched the head of one of the big three on television this evening clearly imitating a politician on the stump precisely because they have crossed over into that world. It is not good news. Private should be private where the market is merciless to those do what these people have done. Thanks for posting.
5. 

   John Phillips says:

   December 5, 2008 at 8:58 am

   CO,

   Thanks for your comment. Your analysis is right on the money (no pun intended).

   Thanks also for putting this on your site.

   John