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  • authored by A. J. Zaccanti
  • published Fri, Jun 13, 2003

CEOs

The new terrorists allowed to hijack the American Dream

The principles of CEOs and their counterparts should have no "escape clauses". We continue to hear the same jaded cliché, "We must pay these exorbitant salaries to retain leadership with the talent and expertise essential to the success of the corporation". When in reality, a vast number of these licentious corporate executives are merely exploiting their positions for personal gain.

It is quite ironic that virtually all corporations have established a code of conduct or code of ethics that employees are expected to follow. The code typically stresses notions of honesty, integrity, and loyalty and prohibits any activity that would injure the business. However, it is clear from the actions of various corporate executives that have recently been exposed in news reports, that only the employees are expected to follow this code.

Despite the fact that corporate executives are under a fiduciary duty to act in the best interests of the company, these same executives are permitted to command very lucrative positions that in no way aid their company and it's shareholders, but rather are guided by principles of self-dealing. It seems that while employees are expected to make significant sacrifices for the company, these same corporate executives are allowed to engage in wholly self-serving behavior.

It is so indicative of today's corporate environment, which has demonstrated an inclination toward rewarding many of America's CEOs and their counterparts for poor performance. Despite these ominous economic times where we have been witness to mass layoffs of competent, loyal employees, there is a decided trend toward rewarding many in the corporate hierarchy regardless of their proven poor performance. It is apparent that employees, shareholders and the economy are made to suffer for the mistakes and mismanagement of others.

The current corporate mentality focuses on promoting the interests of those individuals at the top of the pyramid who think in terms of only boosting the company's short-term stock market performance at the expense of the health of the corporation. This mentality has operated to 'downsize' the corporate structure in an effort to increase stock prices, despite the fact that employees who were fortunate enough to retain their positions have done so at great personal cost. Employee rewards have been increased workloads, a reduction in compensation, diminishing health care benefits and uncertain retirement plans. Consumer and/or shareholder rewards have been inferior services and quality as well as a significant decline in their investments.

The daily news is filled with examples of corporate abuse in the form of obscene salaries, lucrative stock options, outrageous bonuses, forgiven loans, excessive health care, extravagant expense accounts, pensions comparable to salaries, lavish homes, limousines and corporate jets. These corporate executives have taken so much that any past, present or future concessions made by the employees will have little or no impact.

Boardrooms still resonate with the 'good old boy' network that excludes all but a few from their highly private club. More than that, most board members serve on the boards of numerous companies, which ensures that the same corporate mentality will be perpetuated. These are the boards that reward their executives for running up stock prices in the short term at the expense of the long-run interest of the company and it's shareholders.

In addition, the continual awarding of these shameful perks equates to more money being siphoned from the corporations as well as the economy, which in turn impedes economic growth, corporate research and development and employee welfare. This type of mentality also promotes the 'competitive-environment theory', which in turn provides the justification for additional cost cuts and layoffs as well as fueling corporate executive's greed.

The upper echelons of the corporate structure have taken extremely good care of themselves while conveniently ignoring the employees who have labored to provide the assets that fund the corporate leaders 'golden parachutes'. It is time to recognize that these employees - whose loyalty, dedication and diligent efforts have allowed the monetary gains of a few - also need to be properly protected and rewarded.

Similar to the sanctions imposed against drug dealers, corporate executives who have gutted the company coffers for personal gain should be forced to relinquish improperly obtained funds and property. This would certainly prove deterrence to any corporate executive who contemplates squandering employee benefits in pursuit of a luxurious life style.

Justice would truly be served and investor confidence restored in not allowing any executive to hide behind the corporate shield, but rather bear the economic responsibility for their wrongful acts.

In sum, it is the executive who should feel the pain that accompanies corporate economic devastation, not the innocent employee.

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