Originally posted by Phil Of Mac
Running an organization of hundreds, possibly thousands of people and providing needed services to thousands daily is easy?
Of course it's not easy. I'm just saying that something is not quite right when a company fails, its employees are put out of work, and its CEO walks away with millions of dollars in the bank as a token of appreciation for his effort. What is this, the Special Olympics, where everyone who tries is a winner? If this guy really wanted his company to succeed so badly, he would have maybe allowed the company to keep a portion of those millions to help it pay off its massive debts, don't you think? If he pulls UAL out of its nosedive, he's a hero, and if he doesn't, he's still the person at the controls who allowed it to happen. The reason I say he
allowed it to happen and not that
it happened to him is because, obviously, he did
not do everything he could to help save his company.
I don't quite get how you figure that you make more money if you drive a company into bankruptcy.
I never said one makes more money by driving a company into bankruptcy. What I said is that an executive's career/salary path is not necessarily tied to their performance. One
could make more, and one could make less. Career path has as much to do with power and connections as with performance.
You make more money by making a larger profit for your company, if you own part of the company. If not, making large profits will inspire boards of directors to give you a larger salary and big bonuses.
That's how it would work in an ideal world. In the real world, profits are not the whole picture. They
are still important, for the employees and the executives and the shareholders and everyone else. But the executives are
much better equipped to deal with rough times than their employees, which means that when profits fall, it's not the end of the world for the execs. (Nevermind anyone else.) It's the little guy, not the fat cat, who gets hurt the most. Thank golly the machinists in this case are unionized, or they'd be making minimum wage and the execs would be making three times as much with nothing additional to show for it.
And any board of directors is more likely to hire a CEO known for making huge profits than one known for causing bankruptcies. Why? Boards of directors own large amounts of stock, and are elected by stockholders. All acting in their own best interest.
And when you're on the board of directors, and your company is heading for disaster, and it will surely fail without a major overhaul, what do you do? You hire somebody fast that you think will be able to turn things around. And you pay him lots and lots of money - you have to, because he knows you need him badly. So this person hired to save the company either does his job and saves the company or helps - disproportionately to any machinist, thanks to what he's just been paid and thanks to his level of control - to kill it.
Look at Steve Jobs. The board of directors gives him expensive gifts, like private jets, because Steve Jobs makes tremendous profits for Apple. Whereas they fired Gilbert Amelio, Michael Spindler, and John Sculley for almost driving the company into the ground.
Yes, Apple fired all those guys. And still paid them all millions before they were fired. If, for some reason, Apple starts bleeing money badly and is in danger of bankruptcy, who will you blame this on? The Taiwanese workers who make $3.50/hour and don't assemble their products fast enough? Or Steve Jobs, the one who is actually in control of the company and who has been endowed with lavish gifts and a king's salary, all of which
could have been used to help weather the storm had the board not been such spendthrifts and had Jobs not been so warm to such imprudence? If you're on Apple's board and Apple is doing really well and the you want to pay Jobs a billion dollars, fine. Go for it. But when/if times get tough and all of a sudden you find that Apple is a billion dollars in the red, don't blame the "little people" you just pissed on (by not giving THEM bonuses instead). Blame Jobs and blame yourselves.
