CEO "Greed Is Good" Ethos--The Robbery Continues Big-Time

[marmar]

from the Working Life blog:



CEO "Greed Is Good" Ethos--The Robbery Continues Big-Time

by Jonathan Tasini
Tuesday 01 of November, 2011


The "Greed is Good" ethos--let me get my hands on every dollar possible no matter how many people lose their jobs or how sleazy I look or how bad this is for the shareholders--has not gone away. As I've argued, part of the problem is that, since the financial crisis in 2008, the system has gone after a few little fish but let the big fish get away. For your consideration, the newest installment courtesy of, among others, Jon Corzine.

I'll start with Eugene Isenberg. I know this happens to everyone of YOU, the 99 percent--you give up a job and get paid a king's ransom:

Eugene Isenberg, the chairman and chief executive of Nabors Industries, is pocketing $100 million just to give up one of his two titles. That seems absurd. But the board of Nabors, a $5.3 billion oil drilling company, was hamstrung by an old contract. Even so, the stock of Nabors has underperformed for a decade.

Mr. Isenberg’s princely deal seems particularly odd given that he will remain as chairman even as Anthony Petrello, the longtime No. 2 at the company, replaces him in the chief executive role. There is little in Mr. Isenberg’s record in recent years that justifies the payout.

Of course, a reasonable person would ask how the board was "hamstrung" by this contract. Let's understand a basic fact--one that Graef Crystal, one of the pre-eminent compensation consultants, explained to me at length in my 2008 book, "The Audacity of Greed": CEO contracts are products of cronyism, negotiated and approved by boards of directors that are chock full of hand-picked friends and/or business associates of the CEO. .............(more)

The complete piece is at: http://www.workinglife.org/blogs/view_post.php?content_id=15330

[no_hypocrisy]

1. Look at corporate boards of directors.

They're the ones who draft and sign the contracts. Nobody's making them agree to such absurd terms.