[Pages 303-305]
As detailed
in Part I, corporate board rooms of America are manipulated over time to place
the CEO into some God-like post surrounded only by “yes men” [and “yes women”] who simply rubber stamp whatever the CEO
wants. At the top of the CEO wish list are millions upon millions of dollars in
free stock as well as a golden parachute escape hatch to ensure the CEO never
bumps their financial knee no matter what. While CEO pay is the issue that gets
all the press, it is how they are paid as much as the outrageous amounts that’s
destroying the American Dream for all average Americans.
Once a CEO
gets their hooks on stock they can quickly sell off, via free or reduced price stock
options, their focus is all about getting the stock price up and almost nothing
else. If their efforts to get the stock price up results in everyone in the
company loosing their job and the company ceasing to exist — the CEO walks away
with millions in a prearranged no way to lose scam. In return for this deal, the
CEO in turn rubber stamps outrageous compensation packages for all board
members in good favor to ensure they go along with the scam. Once the fox
watching the hen house scenario is firmly in place, the CEO and board go about
raiding the company to push up the stock price at the expense of the workforce.
Mergers, acquisitions and downsizings are the order of the day to ensure
stockholders, the CEO and board members walk away with millions. Once the scam
is completed, the CEO is set for life even if they never head another company
and board members take their pay off and simply find another company host-beast
to begin sucking dry. To see how it works, look no further than Richard Fuld,
former CEO of Lehman Brothers and Angelo Mozilo, former CEO of Countrywide who
both — after mismanaging their respective company’s business operations and
running them into the ground — are now sitting on millions as former employees
suffered for their greed, as well all of America.
At the core
of this insidious scenario, repeated over and over throughout corporate
American, are free stock and stock options awarded at a fraction of their value
to CEOs and board members. Once the stock is in hand, it’s a rape and pillage
free-for-all by all members of the board and the CEO with only one goal — GET
THE STOCK PRICE UP! To get the ball rolling, a good downsizing will make Wall
Street react positively and then it’s on to possible mergers and acquisitions
for the same sole purpose. Once the stock price is up, the CEO and the board
starts cashing in by selling off their stock. Americans and workers have sat
idle for more than 30+ years as they watched the same game in corporation after
corporation take place as workforce after workforce is decimated and thrown
into the streets. With stock in hand, the long-term prospects for the company
its employees are dead last on the list of CEO and board member priorities.
Who benefits?
Obviously the CEO and board benefits, but it’s the top 10 percent of Americans
that now own 90 percent of all stock, who benefit handsomely as well.
Primarily, it’s Wall Street, hedge funds and our American aristocracy who reap
the most money from stock ownership and corporate bleed-out techniques. Who
pays for their greed? America at large, starting with employees and
every community in which a raided company operates via the local and state tax
base as well as the wider economy.
There is a
simply fix, not perfect, but a fix that will go further than any measure in
decades to help block boards and CEOs from rape and pillage raids: NO FREE
STOCK or REDUCED PRICE STOCK OPTIONS for CEOs and members of the board! In
theory, such legislation seems like a simple fix, but in truth it may encourage
even more corporations to incorporate off shore just to skirt the law. Nonetheless,
such legislation needs to undergo serious consideration and analysis. What
doesn’t need any further consideration is a change in the accounting rules
whereby corporations simply issue stock or reduced options to boards and CEOs
off the balance sheet as payroll expenditures. Free stock and options are pay,
no less than the payroll checks you receive. Therefore, when millions of
dollars in stock are bestowed to boards and CEOs they must be accounted for on
the books out of the corporate bottom line — just like your paycheck.
Furthermore, CEOs and board members must be compelled to pay income tax on the
stock awards in the year they are received — instead of deferring the income to
another year or counting it as capital gains income to lower the tax burden to
around half of the income tax rate.
Once legislation
dictates a change in accounting practices and tax treatment of such stock
awards, you’ll see far fewer free stock awards and reduced price options for
board members and CEOs. In turn CEOs will again have a long-term vested
interest in keeping their job instead of bleeding their corporate host-beast
dry like a vampire and flying off into the night.
Since the
top 10 percent of Americans now own 90 percent of all stock — with 44.1 percent
owned by the top 1 percent — average Americans who own only 10 percent
collectively have virtually no say whatsoever in corporate stock awards to CEOs
and board members. Nonetheless, assuming it’s a safe investment, if you work
for a publicly held company and don’t own as much of their stock as possible [along
with your fellow employees], you’re blowing in the wind. If you’re not
attending stockholder meetings, voting against cronies of the CEO from being on
the board and fighting tooth and nail against excessive pay and stock options
for your CEO . . . then you should at
least be sending out a lot of resumes. The percentage of stock owned by
employees in America is nothing short of pathetic and
few if any — even pay attention to who’s on the board, merger and acquisition
rumors or anything else that actually matters. Here’s a hint, nothing
significant to your financial well being over the long hall is going to arrive
via your company newsletter. In there you’re going to get one message:
everything is just dandy, the CEO is a wonderful human and just keep your head
down, keep working 14 hour days and the company will look out for you. Yea
right . . .
Admittedly,
if all employees buy up all the stock they can get their hands on, for most
companies it pales in comparison to the number of shares owned by the top 10
percent of Americans, but employees owning stock carries far more clout than a
1 to 1 ratio of stock owned by outsiders. CEOs and corporate boards don’t want
their employees at stockholders meetings, they don’t want you paying attention
and they don’t want you voting against cronies of the CEO from sitting on your
board. They don’t want you communicating with each other and they sure don’t
want Wall Street rumors circulating within the rank and file.
A partial
solution to changing the game is all about buying stock as well as organizing
and communicating within the employee network. On the other hand, if you are
not wise enough to conduct such activities under the radar . . . you also know
all too well that your personal items will be boxed up and you’ll be escorted
to the front door by the Human Reaper (HR). Create a pseudonym and start a Facebook
page or launch a website or blog to get the word out. Be a thorn in their side
and just like everything else going forward, verify everything before you trust.
If people are being cut in a division, rumors of a merger are in the air —
expose it to every single employee!
With the
history of American CEOs, anyone that blindly trusts senior management and the
CEO, are quite frankly . . . an idiot! In far too many cases, the CEO is simply
waiting out the vesting time period for their stock options . . . once in
place, it will be time to take the money and run. It’s the system by which
corporate America now functions to the detriment of
the American workforce and unless we fight it tooth and nail going forward . .
. the American workforce and America at large will continue to lose out
to the aristocracy.
