A
lucrative provision in CEO contracts encourages corporate chieftains to sidle
up to their competitors.
By
Where’s Charles Dickens
when we need him? The novelist, who laid bare the shame of gross income
inequality in 19th century England, came up with some perfect names for his
more despicable characters, including Scrooge, Mr. Tulkinghorn, and Miss
Havisham.
So I’m wondering what
moniker Dickens would’ve given to Robert Marcus.
Who? He’s the CEO of
Time Warner Cable who already won gold in the 2014 Greed Olympics for grabbing
the most cash with the least effort in the shortest time.
Why would a CEO rush to
eliminate both his corporation and his own job? Perhaps because of a lucrative
little provision in the contract he signed to become Time Warner’s honcho. It’s
a CCC — a “change of control clause.”
This is yet another way
for CEOs to feather their own nests, for that kind of clause hands a big golden
parachute to the top executive of a corporation that gets sold.
In this case, Robert is
pocketing $80 million. Yes, that’s roughly $1.8 million a day for
each of the 44 days he “worked” to sell off the company.
What we have here is a
perverse form of incentive pay for corporate chieftains. Rather than rewarding
them for out-competing their rivals, a change of control clause encourages CEOs
to sidle up to their competitors and whisper: “Psssst, wanna buy my
corporation?”
Not only did Marcus
sell off Time Warner, but his self-serving deal will also sell out untold
numbers of its employees who’ll be made “redundant” by the merger.
We hear about America’s
growing income inequality gap, but here we can actually see it widen: One rich
man is gaining an extra $80 million while hundreds of workers will lose their
jobs.
OtherWords columnist Jim Hightower is
a radio commentator, writer, and public speaker. He’s also editor of the
populist newsletter, The Hightower
Lowdown. OtherWords.org