The Great American CEO Scam

As most of you know the United States and Europe have been taken over by the corporations, and the rest of the world is their immediate goal. Led by the banks and the weapons industry. But that aside, here is a little of what goes on in these corporations:

The Great American CEO Scam

Ford has broken no new ground here. In 2000, Disney laid off 4,000 workers while its CEO, Michael Eisner, earned $72.8 million. Cisco laid off 8,500 workers in 2000 while the boss, John Chambers, got a 40 percent pay increase to $28.7 million. Bernard Ebbers, CEO of WorldCom, laid off 6,000 workers while persuading his board to give him a $10 million bonus.

www.sfgate.com.../chronicle/archive/2002/01/20/IN79389.DTL&type=printable

This just rams it home that we are nothing but dispensable slaves to these greedy corporations. Whether you work at Disney or live in fox hole.
And it should scare you to think that these guys are buying White House policy.
You make the products the World runs on, your labour, your sweat and blood. What do the CEO's do? Oh yeah, they own the machinery...Oh, and collect the profits. They even pay people to count it for them.

Your country has been hijacked by corporations. The population is nothing but a machine for making money. Money that allows a few people extreme power.
They are busy oiling the machine so it works with less fuss. Riots are messy and demonstrations make them uncomfortable.
They want to create chaos, but they want chaos they can control. Because out of chaos comes order as they say, chaos for us and order for them.
The only order we get is the law kind.

AP&F...

I'll bite -

Each company you mentioned is traded publicly - you too can be the owner so quit whining, buy some stock and join them. Vote out evil board members and all that crap.

Oh - and by the way, every company got fat during the bubble - those 8500 Cisco jobs @ ~ 80,000/year SAVED Cisco like $680M a year ongoing, not to mention closing buildings, reducing electricity costs, etc, etc.... Supply and demand also plays a part and if the market cools you better reduce costs and fast. Yippee if you are an owner.

Now, there are maybe 1000 really big companies in the US and the competition to retain good management is fierce. You also have post Enron Sar-Box to deal with and if I were a CEO I would demand a raise because I would now have to sign off on all the financial statements and be held personally liable for any boo boos....

Corporations exist to make money..period. Without corporations there are no jobs. CEO's get paid to make the company money. If they don't make money they are out, like the HP "person". It isn't that hard.............make the company money..........make money.............or get out.

The big difference is the long term issue. Making money over the long term instead of "this year" stupidity. It all equals out, Enron---dead, Arthur Anderson --dead, so on and so forth.

Originally posted by DrHoracid
Without corporations there are no jobs. CEO's get paid to make the company money. If they don't make money they are out, like the HP "person".

Poppycock! People worked jobs for thousands of years prior to the NASDAQ, the DOW JONES or the AMEX!!! ANOK is probably a little closer on this issue than you think.

How about the options racket?

Corporations pimp their options, offloading them onto unwitting employees while making promises that are never kept. The options have to be declared as earnings, and when the company goes bankrupt due to mismanagement and profit taking by the top officers, everybody below them loses bigtime. Not only do they not make the money from the options, but they end up owing more to the IRS.

My mother got ripped off in this exact way by a company in Manhattan. They sold millions in options to employees, backing up their pitch with inflated numbers and false promises of accountability and revenue that was never there, then took all the cash out of the company and distributed it around to third party affiliates, top officers, and no interest loans.

The CEO, after three questionable mergers and a host of ethics violations between the higher ups, got to keep his 4 million dollar house, and his boat, and his Benz. The employees never even got severance. The case is still winding its way through bankruptcy, and the money trail has long gone cold.

Corporate criminals need to be punished for their crimes. Otherwise there is no justice.

The left promises everything and delivers nothing but poverty and tyranny.

Capitalism promises nothing and delivers the most people out of poverty possible.

You want a perfect world get rid of greedy Communist.

This issue is far to important to confuse into matters of left and right.

Corporations are indeed money making engines. They will pay the cheapest possible for all labor and charge the most possible for all products or services, given market conditions. The profits, which move back to the owners of the stocks, are the goal of the CEO largely because he is often paid in stock (in order to align his interests with the stockholders).

Corporate business is running more and more of American life. As someone else pointed out, from the monitor you're staring at to the newspaper or internet media site many people absorb as everyday are created by corporations.

UofCinLA, the truth of the matter is that there is very little you or I can do--unless you have a few more billion dollars than I am assuming. The stockholders of a company don't vote democratically. They vote based on the number of shares they hold. Its all about money--even on that level.

Many in America's middle class are able to elevate their standard of living in via suburban McMansions, maybe buy a few shares of stock, and fill their homes with Wal-Mart's products (imported from China). After absorbing this "rich" identity, they then oppose ideas like government regulation. The fact is : money is polarizing. The rich are all millionaires by now, and they are getting richer, the poor are getting poorer. This is an unsatisfactory outcome of our economic system.

Today in the United States, the richest 1 percent owns 95 percent of all capital.

Given the dominance of the corporation and private ownership in American society, how free are the people? This super-rich class doesn't dream about a day of work--people will happily manage their money for a fraction of the yield and they can go about their day sipping martinis--while some poor woman in some sweatshop somewhere sews sneakers.

Another unsatisfactory outcome is that this profit-monkey riding the backs of many capitalists drives these corporate entities to act with heinous disregard for the environment.

Anyone who says we need the corporations for jobs is lacking in imagination. The first corporations were formed in the UK and US for public services, but jobs have a much longer history. In fact, many people today have government jobs, like the president, an ambassador, or a teacher. Others go into business for themselves creating a good or service for the market, but without creating shareholder obligations.

The business structure is taking humans is based on economics that is loaded with false assumptions--namely than man acts solely on self-interest. It is today, as though corporations have embodied that personality and are running after profit. If humanity does not force corporations into a REAL obligation toward corporate responsibility through green and social governmental regulations, we will self-destruct. Ideally, let's find a better way to do business.

Its either us, or the corporations.

(Edit for typos.)

[edit on 2-5-2005 by PeaceBeWithYou]

Originally posted by DrHoracid
Corporations exist to make money..period. Without corporations there are no jobs. CEO's get paid to make the company money. If they don't make money they are out, like the HP "person". It isn't that hard.............make the company money..........make money.............or get out.

The big difference is the long term issue. Making money over the long term instead of "this year" stupidity. It all equals out, Enron---dead, Arthur Anderson --dead, so on and so forth.

When it comes to fortune 500 companies that statement is for the most part inaccurate. The biggest payday for a CEO is the day he gets fired. These guys make HUGE profits to run companies in the ground.

Typical boardroom discussion "I'm sorry you ran is into the ground financially. Here is a $25 million parting package and a glowing letter of recommendation so you can get another multimillion dollar job with some other mindless corporation."

If Joe Average messes up badly on the job he is fired and sent packing with at best the balance of his vacation pay. A CEO messes up badly and he/she hits the jackpot.

The problem is that there isn't good management these days. Just a greedy lil boys club where they float exectives back and forth between companies to fatten their wallets. There are very few real genius executives and managers anymore. Most are nothing more than oxygen thieves.

The CEO scam is an interesting topic. I am a CPA and work for several public companies. My duties include reporting to the Board of Directors so I have met a number of public company board members. I am also an investor and take interest in governence matters.

Anyway, the scam is quite simple. The Compensation Committee of the Board sets executive compensation. Smart CEOs stack the Compensation Committee with their friends. Often their friends are CEOs at other companies and that Board will consist of CEOs and friends. The objective is stack the Board and Comp Committee with friends and allies that rely on you for support. Nice little circle.

Most BoDs are quite simply a joke. They meet four times a year and have no idea about the company or even what the Company does. Remeber OJ Simpson was on the Board of Honey Ham. Stack the Board with your friends and life is great.

Now in the rare case that the CEO activity is so bad that the Board worries about being sued and will move against a current CEO. This is rare but done to protect the Board.

Originally posted by UofCinLA
I'll bite -

Each company you mentioned is traded publicly - you too can be the owner so quit whining, buy some stock and join them. Vote out evil board members and all that crap.

Are you kidding? Do you know how Wall Street works?

Pension funds (the firms that manage large pools of public or corporate pension funds monies from individual investors), mutual fund companies and wealthy large investors are the only ones that can hold any sway over corporate boards--and it is a rare occasion that there is ever any type of major shareholder action, especially these days. The buy-side--the large investor--is a sheep. They hold all the power, yet they don't want to rock the boat and see their investment go south. The institutional investor is either a co-conspirator to the fraud or powerless to do anything about it.

And do you know where activism gets any buy-side executive?

Fired.

Calpers replaces activist president
By Associated Press | December 2, 2004

SACRAMENTO -- Sean Harrigan, a longtime union official and one of the nation's most outspoken advocates for corporate governance reform, was ousted yesterday from his post as president of the $177 billion California Public Employees Retirement System.

In a 3-2 vote in San Francisco, the California State Personnel Board pulled Harrigan from his Calpers post after five years as the board's representative to the pension fund. It replaced him with Ron Alvarado, whose background is more aligned with the private business and government sector.

A new appointee of Republican Governor Arnold Schwarzenegger provided one of the votes to replace Harrigan.

In a statement, Harrigan said he was "saddened" to end his involvement in "restoring much needed integrity and accountability to our capital markets." His supporters alleged that corporate pressure and Republican lobbying, including some from the governor, helped drive the move.

State Treasurer Phil Angelides, a Harrigan ally on the Calpers board, criticized Schwarzenegger and the personnel board for siding with "corporate interests and against taxpayers, pension fund members, and ordinary American investors."

www.boston.com...

As president of CALPERS, Harrigan sued the NYSE specialists, which caused the CALPERS fund (and everyone else that trades a listed stock) to lose 15 to 75 basis points on every trade--that adds up to millions of dollars a year taken out of the pockets of public employees in California (and billions of dollars for everyone.)

Harrigan also led CALPERS to force tighter auditing and financial reporting standards, and worked to enforce independent boards (ie: reduce management representation on corporate boards) for the companies that they invested in by withholding votes for board members that were uncooperative--even Warren Buffet. CALPERS was even involved in getting GlaxoSmithkline to lower the price of AIDS drugs and funded projects to bring jobs to California.
www.boardmember.com...

These are very good things for investors--not just the public employees that have their pensions in the California Public Employees Retirement System. Of course, they are at odds with corporations and management. He rocked the boat and exposed the little games that corporations play to cook their books and manufacture non-existent profits. He also didn't want complacent or ineffective boards to continue to stay in power.

Fire the bastard!

But there were those who felt that he was just being manipulative--which he must have been because why else would any investment professional want a pharmacuetical company to lower the price of an AIDS drug, cutting into profits? Would it have anything to do with the AIDS epidemic in San Francisco and saving lives of people who worked at CALPERS--no! He must be a tree-hugging liberal operative!

Oddly enough, there are some who feel that "corporate social responsibility" (CSR)--is irresponsible, using the reasoning that sometimes chosing the path that better benefits society forgoes profits--like not investing in tobacco or liquor companies, or firms that pollute the environment, or in countries that abuse their citizens or are at war with the U.S.

There is much evidence that shows that CSR is very profitable--and vital to long-term investment performance success, yet organizations such as the American Enterprise Institute (a conservative think tank), Arthur Laffer (Ronald Reagan's supply-side economist), and Steven Milloy from FoxNews have all made bizarre and unfounded claims about socially responsible investing--which have been taken very seriously by the Bush administration, all stemming from the notion that investors are missing out on profits because firms that adhere to CSR are using an irrational, non-quantitative approach.

www.kld.com...

Using this logic, drug dealing and money laundering are also extremely lucrative industries as well. Is there really a difference in investing in a massively profitable company that cooks thier books, employs 7 years olds in sweatshops, or sells crack to teenagers? They are all maximizing investor returns--should it really matter what they are doing to society?

Conservatives argue that it shouldn't--and institutional investors have a fiduciary responsibility to invest even in firms that are socially irresponsible.

And they are pursuing legislation to enforce such a thing. Arnold Schwarzeneggar was even attempting to disband CALPERS entirely (defeated, fortunately) and let public employees manage their own 401k money. I'm sure that bus drivers and fireman could earn a better return than seasoned investment professionals, right?

Harrigan was only fighting for what's best for the investors he had a fiduciary responsibility to represent--but the corporations fought back. A massive smear campaign ensued and not only was he fired, but there was an industry-wide backlash from Republicans and corporations that centered around the argument--how DARE investors tell us how to run our businesses?

The resulting proposals have ranged from large investors essentially being stripped of their full voting rights, stacking the boards of pension funds with government/corporation friendly stooges, discouraging submission of shareholder proposals to corporate boards with high fees, and authorizing legal action when shareholders intrude on management of the company.
www.business-ethics.com...

This is relevent because if a pension fund that owns a large percentage of a company has no control--and the government is willing to remove the owenership privilege--what power do you think a little shareholder has?

In most cases, retail investors can't even ask questions at shareholders meetings--and that is if you can attend at all.

www.socialfunds.com...
www.boston.com...

It is clear that the intention is to allow corporations to have virtually unlimited power--almost always at the expense of the individual. Sure, corporations employ us, but does that give them the right to misrepresent profits or consistently underperform. Or even worse--dump cancer-causing chemicals in our drinking water, gouge us with high prices for drugs that we need to stay alive, or get off the hook for any harm they cause us?

It seems that government is thinking in this direction. Although the Enron, WorldCom, HealthSouth and other scandals have hurt our economy (Enron took $300 billion out of investors pockets alone), it seems that lip service is being paid to improving financial reporting standards. Also, the corporations' liability is shrinking--and individual legal recourse is becoming more limited, restictions on environmental pollution are being relaxed and prescription prices are just getting higher (my prescription co-pay is now $50!.)

So why is corporate bad-behavior being rewarded instead of reprimanded? And why are individual rights being sacrificed at the expense of the corporation? When government is suggesting that we strip owners of publicly-held corporations of their ability to act, it is a clear sign that the U.S. is headed straight towards fascism.

Capitalism is the biggest con ever perpetuated on mankind.
It looks great on paper, the way it's taught to us in their school.
"As long as you work hard and dream you can have anything you want.
And if your dreams don't come true, don't despair, at a nominal cost we'll supply you with an expensive alternative to keep those feeling of failure at bay. If that don't work we'll sell you a little pill, fix you right up in no time. And don't forgot, support you country, buy our over-priced-made-in-a-sweat-shop-in-Indonesia products. I need a new yacht for the weekend".
But it's just #, and you can cover it in a layer of talcum powder but it still smells like #.

The problem is not about CEOs earning money. The problem is that CEOs profits increase, corporations' profits increase, while people loose their jobs. In other words, the rich get richer and the poor get poorer, by the minute.

There are many posters here in denial of this situation. I hope you or your family never gets faced with unemployment, while your previous company CEO's profits skyrocket.

Greed is why this nation is falling apart.

Greed is why the corporations have no ethics anymore.

Ya sell our products with sex; make them look cool. Make sure everyone who bought our product is "in" and everyone who didnt buy our product is total losers and everyone can make fun of them.

Ya Sure Right...what a Nice System....Not!

This is why america is losing power around the world; because the corporations are destroying our nation.
They are selling us out! They only care about $$$ , they have no loyaltys; and they dont give a crap about you or I.
That is why they are criminals and traitors to the US Constitution
They should be arrested and tried for theft.
They stole Americas dignity and her $$$. They are all criminals.

All corporations should be dismantled. They only make things worse. They only provoke GW Bush and friends to go to war. They did America no Good at all.

Anyone who supports unchecked Greed and Corruption is blinded by the $$$. They say "Nothing wrong with having $$$"

Yes there is something wrong with having alot of $$$. It is YOUR fault that people die all over the world.
People in Africa Starve because your too greedy to share it.
People in America Starve because your too greedy to share it.
People in America DIE because your too greedy to share it.

The American Dream is for ALL AMERICANS not just some corporate big wig!
We should ALL get a piece of the PIE...not just the corporate guy!

We americans should take OUR POWER BACK.

Vote a Poor man into office !!!
Until then; America will keep destroying itself for profits.
I garuntee it.

Like all religions say "Money is the Root of ALL EVIL"
its so true...
espiecally in the case of Corporations.

Guys,

Don't think that this is only a problem in the U.S.. In Europe the same kind of stuff is going on with the corporations there.
Don't forget the first corporations where European. The Dutch East and West Indian Companies to be exact, which is one of the entities that started the slave trade in the North and South American continent.

You have voted muzzleflash for the Way Above Top Secret award. You have two more votes this month.

Well said Muzzleflash!

And Bandit you are right, capitalism is capitalism wherever it's practiced, but this thread wasn't intented as an America vs Europe bash.
I focus my threads on the U.S. cause I live here. I'll leave Europe to those guys.

Note the "little guy" is encouraged to get the 401K and the IRA (individual retirement account) but notice this: the tax exemption is for managed funds, and the fund managers aren't YOU, and they are NOT voting YOUR interests when they vote the proxies of all these stocks that YOU paid for and own.

So in THEORY you can "vote the overpaid CEOs out," (if you own most of your stocks as a free agent) in PRACTICE most people (investing in 401Ks, IRAs, and managed funds) are absolutely NOT allowed to exert control of their own stocks in America, the Land of the Free.

[edit on 5/6/2005 by Noumenon]