Occupy Wall Street, wow! What is going on here?
As usual, many are discussing this in ways that suit their favorite ideological message. Some say it’s a bunch of loonies. Some say it’s the new liberal force for good. Some point out that many of the protestor’s “demands” or “declarations” are really quite reasonable and reflect the original notion of our government as described in our founding documents.
With so much to chew on let me make just one point. This point will look at only one tiny element of what appears to be a very broken financial system.
Recently the board of directors of Hewlett Packard (HP) fired their Chief Executive Officer after a tenure of less than a year. The stock price dropped 47% on his watch. He was the fourth CEO at HP, the worlds largest technology company, in less than six years.
The owners of the company, the shareholders, having lost 47% of their value will now have to anti up over $10M just to get rid of the CEO. It’s in his employment contract.
So there is a “revolt” on Wall Street as the OWS’ers try to make their points but where is the shareholder revolt? This $10M is coming from money that could go directly to the shareholders or go to them through the effective investment of the $10M to improve operations and bump up the stock price. It’s their money.
“Tax the rich” ideas often come in response to the huge shift in wealth in the country to the top 1%. The OWS’ers actually call themselves the 99%. Taxing the rich hurts the job creators say some, but I think taxing the rich begs the question. Why pay $10M to someone who was an abject failure at his job? It’s just plain foolish and wasteful.
Bill Gates became very wealthy not by paying himself at an exorbitant compensation level but because the company he created and substantially owned was hugely successful making his ownership stake very valuable.
It’s time for shareholders, us, to step up to get some reason back into the compensation plans of the hired hands of the companies we own.