Recently, I noticed a deposit made into my RRSP (401-K for American readers) account. There was a notation that this was the proceeds of the class-action law suit against Nortel Networks. For those of you not familiar with the case, senior executives at the (former) behemoth communications company conspired to perpetrate accounting fraud that resulted in perhaps millions of investors losing almost one third of a trillion dollars. Criminal charges against those principles are still in the courts.
Hundreds of thousands of people, myself included, had their life savings wiped out. Right now, you might be thinking "Good for you--you got your money back". Let me give you a clue as to how much of my money I actually got back--I did not break out the champagne when I saw the amount of the deposit. In fact, I'm not sure that it could buy a bottle of Dom Perignon. I chuckled--it was so laughable. I lost almost $400,000 and a successful law suit netted me $199. That's right. There's no missing zeros--one hundred and ninety nine dollars. What I would really like to know is how many tens of millions of dollars the lawyers got for getting me my $199.
The kicker to all this is how much more money lawyers stand to make by defending the thieves and cheats behind all this misery. I'd be willing to bet my $199 that most if not all the guilty will get off with a slap on the wrist if not outright. It's no wonder that things never change. There is no justice.
Showing posts with label executive. Show all posts
Showing posts with label executive. Show all posts
Wednesday 23 September 2009
Friday 16 January 2009
A great, big harrah!
goes out to Seagate. As one of the largest manufacturers of hard drives in the world, and having fallen on hard times, Seagate has announced that it will reduce its workforce by 3,000. No, that's not the part that needs to be applauded. It also said that various executives' salaries will be reduced between 15% and 20%. Now, we're getting warmer. The CEO will take a 25% salary hit. Applause!
Why does the reduction of someone's pay require applause. Simple. Very quietly (to some) the gap between CEO's pay and that of the average worker has widened exponentially over the last few decades. You're probably thinking "Vin, you must be exaggerating when you use the word 'exponentially', aren't you?" Au contraire, my friend. It is almost beyond belief how the wage gap has turned into a veritable chasm.
In 1965, the average Joe's pay envelope contained only 1/24th of what The Big Kahuna's did. Back then, that difference almost sounded reasonable. But greed being the hallmark of the rich, by 1979, that difference had grown to 35. By 1989, it was 71. 1995 was a banner year--it hit the 100 times milestone. Unbelievably, it was at this point that Chief Executives' salaries really took off. By the year 2000, they were making 300 times more than Joe Lunchpail!
If you were making $40,000/year, The Grand Poobah was pulling down about $12 million. And that's not counting the myriad of stock options, bonuses and benefits which can add millions more. Baby, you're a rich man! The tech wreck caused executive pay to be reduced...but it was short-lived. The gap between the poor and the rich continued its relentless, ever-widening journey.
This graph gives a visually-startling picture of the enormity of this untenable situation. Unfortunately, it only shows data up until 2005.
On behalf of all the little guys, a hearty congratulations, Seagate, on taking a gutsy stand on executive pay. Here's hoping your peers follow your sensible and ground-breaking stand.
The Story.
Why does the reduction of someone's pay require applause. Simple. Very quietly (to some) the gap between CEO's pay and that of the average worker has widened exponentially over the last few decades. You're probably thinking "Vin, you must be exaggerating when you use the word 'exponentially', aren't you?" Au contraire, my friend. It is almost beyond belief how the wage gap has turned into a veritable chasm.
In 1965, the average Joe's pay envelope contained only 1/24th of what The Big Kahuna's did. Back then, that difference almost sounded reasonable. But greed being the hallmark of the rich, by 1979, that difference had grown to 35. By 1989, it was 71. 1995 was a banner year--it hit the 100 times milestone. Unbelievably, it was at this point that Chief Executives' salaries really took off. By the year 2000, they were making 300 times more than Joe Lunchpail!
If you were making $40,000/year, The Grand Poobah was pulling down about $12 million. And that's not counting the myriad of stock options, bonuses and benefits which can add millions more. Baby, you're a rich man! The tech wreck caused executive pay to be reduced...but it was short-lived. The gap between the poor and the rich continued its relentless, ever-widening journey.
This graph gives a visually-startling picture of the enormity of this untenable situation. Unfortunately, it only shows data up until 2005.
On behalf of all the little guys, a hearty congratulations, Seagate, on taking a gutsy stand on executive pay. Here's hoping your peers follow your sensible and ground-breaking stand.
The Story.
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