Shareholders as Boo Birds

[marmar]

from Too Much: A Commentary on Excess and Inequality:




Shareholders as Boo Birds
How much higher can executive pay rise? Corporate shareholders, corporate boards are learning to their chagrin, may no longer have the patience to wait and see.
May 5, 2008

By Sam Pizzigati

Last month, at a Hilton Hotel ballroom in New York, things turned ugly for some of Wall Street’s most eminent power suits. The occasion: the annual meeting of Citigroup, the financial colossus that last year wrote off $20.4 billion in subprime-related losses — and has so far this year lost another $9.1 billion.

On hand for the annual meeting: over a thousand angry Citi shareholders. They packed the ballroom. And they wanted answers — about the remarkably cushy rewards that continue to flow to Citigroup’s top executives.

How cushy? In January, just a month after Citi's CEO through the worst of the mortgage mess left the company with an exit package worth $42 million, Citigroup’s board of directors awarded that CEO's chief financial officer, Gary Crittenden, a $12 million “retention bonus.”

The company’s current CEO, Vikram Pandit, did his best at the Citi annual meeting to justify this sublimely generous board gesture. Citigroup, he noted, was operating in a “competitive” environment and needed to pay well to “retain” staff.

The shareholders didn’t buy that explanation — or much of anything else Citigroup executives had to say. They jeered. They booed. They laughed sarcastically. And they cheered shareholders who lined up at the ballroom microphones to vent their outrage.

“Where can you get a job where you do nothing to earn your money and get paid in advance?” asked one irate shareholder. “Citigroup!”

Added another: “There is something wrong in this company.”

But that shareholder didn’t quite have it right. There’s something deeply wrong in all of Corporate America, not just Citigroup. Year after year, through good years and bad, America’s top executives continue to pull in compensation packages that fly in the face of reason — and slap in the face everyone who doesn't sit in an executive suite. .......(more)

The complete piece is at: http://www.toomuchonline.org/articlenew2008/may5a.html

[glowing]

1. I'm sure they can find someone cheaper... there' s always someone from

another country who'd be willing to do it for a lot less.

[izquierdista]

2. Another tragedy of the commons

Because the individual shareholder is only pickpocketed for chump change to compensate these executives, they think nothing of reaching into the shareholder's pocket as if it were their own. These executives are no different from the medieval lord, who when he wanted more money to buy trinkets, thought nothing of selling the peasants' grain. They use their exalted position at the top of the corporate social structure to plunder those beneath them, denying both the common worker a raise and the shareholder a bigger dividend.