Sewell: CEOs gone wild

By By James Sewell and By James Sewell

By James Sewell

Although I’ve been a poor, starving college student for quite some time, I’ve never found myself starving in the literal sense.

I’ll go without new clothes or a night on the town if it means I can sink my teeth into a satisfying order of curry, some street vendor’s tacos, a hamburger and fries from Eat-a-Burger or even just some good ol’ homemade spaghetti and Italian sausage. Sure, my cholesterol level is probably dangerously high, but at least I ain’t hungry.

Still, it chafes my sensibilities when I read about the ludicrous compensation packages being awarded to the Wall Street honchos who preside over corporations whose shareholders and, more importantly, employees are feeling the financial pinch and are stocking up on Top Ramen as if it were the latest fad in fine dining.

The stock prices are tanking, yet these 21st-century robber barons are bringing home millions of dollars, and it’s not at all clear that they deserve any of it.

The sub-prime mortgage crisis has made its way through the market, from the homeowners who are on the brink of losing their homes all the way to the entry- and mid-level employees who signed off of the ill-advised contracts.

But the guys (and they are all guys) at the top? They’re doing pretty good, I’d say. E. Stanley O’Neal, a CEO of a major Wall Street firm (Merrill Lynch), was forced to retire after receiving a severance package of only $162 million. Poor fella. His company’s stock was down 45 percent from the previous January, and Merrill Lynch had reported the largest quarterly loss in its history — $10.3 billion — just a month prior. How much would O’Neal have made if the company had actually been successful? It boggles the mind.

The issue of executive compensation is fairly new, starting most visibly with the collapse of Enron and WorldCom back in the early half of this decade of decadence. Although the CEOs of those companies were rightly thrown in the slammer, their wives have been well compensated for their emotional anguish and now live in Houston penthouses and chic pieds–terre in New York City.

What about the employees of those firms who lost their jobs, savings and retirement funds? Who really knows? More to the point, who really cares? Certainly not the upper echelons of management.

The call for a return to reasonable executive compensation has been heeded just long enough to convince the wider public that things are going to change — that is to say, for about 3.5 seconds, until Britney made headlines with her baby daddy K-Fed again.

And now it’s obvious that nothing’s changed. Corporate America is still a back-scratching network of good ol’ boys who’ll do anything to keep their boardroom buddies livin’ large so when the time comes and they’re “forced to retire,” they, too, will walk away with tens of millions of dollars, unearned, undeserved and unchecked by reality.

How do these men sleep at night knowing that thousands of middle-class employees who toiled endlessly to earn their paychecks are now reliving the dream (or nightmare) of being a starving college kid, only this time they have (good) mortgages, wives and/or children depending on them? Probably pretty well on their Tempur-Pedic beds with 600-thread count sheets and a trophy wife or girlfriend (or both) beside them.

It’s disgusting, but what are we, the average citizens of middle-class America, to do? I don’t have the answers, but paying CEOs to drive their companies into the ground ain’t a good start.

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