Reward For A Job Poorly Done?

richard-smithRichard Smith was the CEO of Equifax … until Tuesday when he stepped down from his position.  Or was asked to step down.  The investigation into what happened in the Equifax security breach that was made public earlier this month is ongoing, and there is no word whether Mr. Smith, and the two others who also stepped down were responsible.  143 million U.S. adults’ personal and credit information was hacked during May thru July.  But now here is what sticks in my craw …

Smith will receive a pension of $18.4 million.  $18.4 MILLION!!!  Plus … he stands to gain an additional $5 million IF he is found guilty of some wrongdoing!!!  As it stands, he is leaving by ‘mutual agreement’, and as such is not eligible for the $5,000 severance payout.  But, if the investigation should provide evidence that Smith was in the wrong in some way, then Equifax would change the status of his departure to ‘terminated’, and then he would be eligible for severance. Chew on that one for a minute or two while I go fix myself another cup of coffee …

wine

Coffee

And in addition to the above, the company is still considering certain other awards that could, potentially, end up with Mr. Smith receiving as much as $90 million.  I think we need look no further than this to figure out at least one of the things that is very, very wrong with capitalism, at least as it is practiced here in the U.S..  $18.4 million is obscene, under any circumstances, but when there is a strong likelihood that this man had at least some role in exposing nearly every adult in this nation to broad theft, he should not be getting a penny, let alone tens of millions of dollars.

I was curious about CEO severance packages in recent years, so I went in search of … and I think your jaw will drop when you see these …

  • Jack Welch, General Electric, 2001 – $417 million
  • Lee Raymond, Exxon Mobil, 2005 – $321 million
  • William McGuire, United Healthcare, 2006 – $286 million
  • Edward Whitacre, AT&T, 2007 – $230 million
  • Bob Nardelli, Home Depot, 2007 – $223 million

Compared to these, Richard Smith must feel like quite the pauper.

money-2Admittedly, I do not know any of these men, so I cannot speak of their character.  But speaking broadly, it is my firm belief that there is no one human being on the face of this earth who is worth that many millions of dollars.  My other point would be that … what the Sam Heck does one do with that much money?  I tried to find out if Jack Welch gives anything … anything at all … to a legitimate charity, but I can find no evidence that he does.  Interestingly, his net worth as of this year is $750 million.

Back to Mr. Smith … if he was in any way responsible for putting almost every adult in this country at risk of financial jeopardy, why should he benefit by a single penny, much less millions of dollars?  There is something very wrong with this picture, at least in my mind.  Apparently living above those ‘glass ceilings’, living in the bubble of wealth, robs a person of his conscience.  It makes me appreciate people like Bill Gates who worked hard to actually earn their money, and then use it to do good things for people less fortunate.

This is the problem I have with capitalism today.  So many have wealth beyond what they could ever use, while so many on the other end of the spectrum barely survive.  I have little, but enough to meet my needs, so I am happy.  I do not wish for millions, although I would wish for the wherewithal to help people more.  My conscience does not tap me awake at night … I wonder if Mr. Smith’s will?

42 thoughts on “Reward For A Job Poorly Done?

  1. It’s too bad the American people have no voice on the Equifax Board of Directors. The supposed argument for small government is that the private sector does the same work better and perhaps cheaper. Obviously, this is not always the case!

    Liked by 1 person

    • No, in fact it is rarely the case, I think. Capitalism in theory looks good, just as does socialism. The problem is that neither of these theories take into account human greed. The capacity for some humans to simply turn off their consciences, to fail to see the human suffering of the other 99%, simply astounds me. I guess the best i can say about it is that I’m glad to have remained relatively poor in money, for I still have a conscience.

      Liked by 1 person

      • Yes. Money leads to power and power tends to corrupt… etc. We are all human, including our business and political leaders.

        Freud didn’t outline 12 ego defense mechanisms for no reason. Corruption begins in the psyche — long before laws are broken… or changed to give unfair advantage to a few.

        People need sensible boundaries. A healthy democratic society should be working to elevate principles that serve balance and justice.

        ***

        I’m all for healthy profits. We all want to believe we can climb the economic ladder with good ideas and hard work — the American Dream. But when you have excessive profits, within a context of growing inequality, those days are over.

        Wealthy elites aren’t going to restore the American Dream. (The kindest interpretation: from within their comfortable bubbles, they cannot see the need.) The people are going to need to do it, from the bottom up!

        Liked by 1 person

        • Very well said! It seems to me that once a person reaches a certain level of wealth, it becomes an obsession, and their entire life revolves around getting more, more, more, even though they have no need of more and couldn’t possibly use all that they have in their lifetime. Heck, I could live off the interest on Trump’s net worth! I think that they cannot possibly be enjoying life, if they are so focused on increasing their own wealth at the expense of those less fortunate. Cruises, steak dinners, mansions, travel … those have no meaning, really … at least not for me. I wouldn’t mind having enough to buy a decent car though 😀

          Liked by 1 person

          • I’m with you, Jill. After a certain amount, money does not buy happiness.

            I have pondered why wealthy people behave as though they are needy. It’s only speculation, but I have wondered…

            Are they afraid of losing it? Trying to prevent a possible diminished status and lifestyle?

            Are they playing a competitive game with their wealthy peers? Trying to attain more power than their buddies? (All in good fun, of course.)

            Because their goal is to acquire more, not to hurt anyone, do they feel innocent? (They’ve never heard of system dynamics, can’t comprehend their contribution to inequality, poverty, and suffering.)

            Whatever the underlying motivation, the rest of humanity, even the Earth, apparently carries no significance within their tiny personal kingdoms.

            Liked by 1 person

            • JoAnn, Jill, I feel wealthy folks accumulate wealth as a way of keeping score. Like the MITWH, he has to win every conversation, every encounter and show how wealthy and successful he is. That is why he wants his name on every thing. If they passed an Obamacare fix bill in Congress and told him it would be rebranded as Trumpcare, he would sign it in a New York minute. Keith

              Liked by 2 people

              • Yes, Keith! Score-keeping is definitely going on. If only these contests had merit outside their own tiny spheres. It’s time for this type of wealthy individual to understand that they are, at best and most kindly, utter bores.

                Liked by 1 person

              • I think you are right, Keith. A huge ego trip. He has but one goal in mind, and the rest of us are merely pawns on a giant chessboard. He is not the first in history, nor, I suspect, will he be the last. Eventually they all fall down, but what cost to the nation before that happens?

                Like

            • I think that the answer may well be “all of the above” and one more thing: a sense of entitlement. Remember when Jim Bakker said during an interview that he did not feel guilty about his lavish lifestyle because “God wants me to have nice things”.

              Liked by 1 person

                • Yes, we can all rationalize and find means for justifying things … but most of us have a conscience and there is this internal debate between conscience and desire, whereby usually conscience wins out. With some of these people, I believe ‘conscience’ is either very weak or non-existent. And yet, I still believe they are in the minority … they are just louder, more obnoxious, and therefore they get the lion’s share of the attention.

                  Liked by 1 person

  2. Jill, this is frustrating. I have worked over the years with compensation and severance pay issues, I can easily say Boards of Directors do not have the stomach to fire a CEO for “cause.” Even with legitimate reasons, they do not want a lawsuit and the resulting notoriety. Plus, they know the CEO and it is harder to fire a friendly face for cause.

    I have seen CEOs wreck companies, have scandalous affairs with subordinates, sexually harass subordinates, etc., Typically, they walk away with multiple tens of millions in severance.

    Roger Ailes not only was accused of sexual harassment, he created a culture of sexual harassment at Fox.
    Yet, he walks away with $38 million.

    Keith

    Liked by 3 people

    • Yes, I was thinking of Fox as I began reading your comment. Every now and then I run across a news item about a company that puts its employees first, and I am heartened … briefly. But corporate greed is much more the norm, and Trump’s ‘tax reform’ plan will only make it worse. Like every other political/economic system, capitalism looks great on paper, in theory, but the reality is something else altogether. Human greed is never accounted for in the models.

      Liked by 1 person

      • Jill, greed is a powerful motivator. It leads to planned indictments to discredit everything that is perceived to stand in the way of profits – unions, regulations, litigation, media, e.g. I used the word “perceived” as enlightened leaders know that the key to success is treating customers and people who deal with your customers or create your products well long term and improving your model when needed. A business leader once said regulation does not stand in the way of a good idea.

        Keith

        Liked by 1 person

        • You are right … greed IS a powerful motivator and apparently it clouds logical thought processes. Trump was a lousy businessman in the way he treated people, and it shows from his many bankruptcies. That he is wealthy is more a result of the fact that he started out wealthy. Had he started from scratch, using his gestapo management style, he would surely have failed and be working in a steel mill in Pittsburgh now. But what bothers me as much, is the role lobbyists are playing in our government and our elections. It should not be all about who can line the most pockets in Congress, but it seems that it is. Sigh.

          Liked by 1 person

  3. Typically American CEOs make between 400 and 700 times as much as their average employee. Brazil is second behind America in this statistic and they trail by millions of dollars. It is a travesty and is nearly impossible to justify — though the attempts border on the ludicrous.

    Liked by 2 people

    • I agree fully … capitalism looks great in theory, but the reality is that human greed makes it an abomination. Sure, I believe in being able to earn more with hard work, etc., but really … who the heck needs hundreds of millions of dollars? And how do they sleep at night, knowing that others are going without the basic essentials such as food and shelter? I just cannot fathom it.

      Liked by 1 person

  4. Dear Jill,
    The CEOs are making millions and they want a tax cut…since when is capitalism supposed to reward peoples for doing a lousy job. I bet their front line workers are lucky if they get a 3% raise. It’s time for big business to include peoples who are making the companies more productive and profitable, share in the spoils.

    Hugs, Gronda

    Liked by 2 people

    • This is an example of capitalism gone bad. Corporate greed carries the day, and Trump’s new tax proposal will only put more money in the pockets of those who already have more than they know what to do with. When I was in the corporate world, I used to always tell the higher-ups that their greatest asset was not the fancy printing presses and equipment they bought, but the people, for without the people, they are nothing. Sometimes they even listened to me. But these days, the people are considered expendable. Herb just found that his company is cutting a large number of positions at the end of the year … his included. 😥 Hugs!!!

      Liked by 1 person

  5. Not a chance. I think you soon learn at the top like this that a conscience doesn’t pay but having the job does.It’s quite sick the bonuses and the pensions you can ‘earn’ in the rarified atmosphere of the upper echelon of the boardroom.
    xxx Cwtch xxx

    Liked by 1 person

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