Just when I thought I’d become numbed to the daily dirge of dire financial news, along comes a New York Times report that left me stunned.
In an article aptly headlined “Gimme Back Your Paycheck,” Gretchen Morgenson reported that executives at seven of the financial industry’s biggest losers leached $464 million in performance pay since 2005. They were as adept at wiping out shareholder wealth as they were at accumulating their own wealth — their companies lost $740 billion in stock market value in the past two years.
The seven companies whose executives won by losing are the American International Group, Bear Stearns, Citigroup, Countrywide Financial, Lehman Brothers, Merrill Lynch, and Washington Mutual. The Times reported that since 2007, the Deficient Seven bled $107 billion in red ink, which doesn’t include AIG’s newly inflicted, $60 billion gusher. As that astute financial analyst Bob Dylan once observed, “there’s no success like failure” — at least among bankers.
In the Alice in Wonderland world of finance, we yank a small performance sample out of its historical context, isolate it from the institution’s larger systemic impacts, and increase executive pay based on the amount of revenue lost. Alice had it right: things just get “curiouser and curioser.” It’s as if the CEO of a bank orders his management team to steal money from its depositors, reports that stolen money as profits, and asks the board of directors to award the team with lavish bonuses based on their “exceptional performance.”
We can howl for their paychecks, but we know they’ll never give it up. A recent New Yorker cartoon, which depicts a gaggle of upper-crust bankers worrying over their golden eggs, probably got it right. “Listen,” one of them exclaims, “we just stay silent and look remote and concerned and dignified, and we get to keep the damn bonuses.”
Discussion: 1 Comment
Perhaps the world will slowly wake up and see that everything has to change to go forward. The secret is to make the changes before they are made for us in a blanket way. These short sighted over paid under qualified people are lacking in people skills and conscience, they see the writing on the wall but do not have the skills or reason to stop the avalanche, it is easier to step out of the way, or so they think. Nothing easy lasts long, hard lasts, not forever but longer. We need more autonomy in our jobs and more skills in communication. We think but don’t speak, we speak but don’t think. Is the role of a great leader to blindly hack out a path ahead to reach the next goal. If all we are interested in is goals then we have missed the point of life. Go watch a human being born and see it is not about the goal it is the journey to get to the goal, the goal is just a place to set up for the next journey. When the bankers start looking at their own lives and the lives of the people around them and caring for people and not things then we will be in the right track. Mistakes are necessary in learning, but the requirement of success is to change/learn from the mistakes.