sometimes the world does seem to get it right and then we have to give big kudos to MSM. today's nytimes has a slew of stories raising everyone's conciousness around different forms of corporate corruption.
one big question for me is why we dont hear more corporate and political leaders denouncing the level of ceo and upper management stealing (i mean compensation). this is one of the great injustices of our time.
today's paper highlights the amazing story of the team running UAL. why should they get 8% of the new company for showing up to work? this isnt a startup where people are forgoing cash comp in the hopes of equity upside. the team originally demanded 15% with the ceo asking for $80m in comp. the bankruptcy court says he'll have to make do with $40m.
what's ironic is that in another story they talk positively about terry semel at yahoo having now made some $630m in options and stock. it may sound hypocritical at first that they would laud semel while denegrating the guys at UAL, until we realize that semel put up $20m of his own money and then proceeded to lead a company in massive growth.
on the enron front, it appears that there is now a big chance that mssrs lay and skilling will escape prison since their defense team believes the accounting chicanery (cool word:) they oversaw will be too complicated to explain to a jury of dumb americans. if those two walk free while poor dumb bernie ebbers serves life in prison we'll know just how unjust our country is.
on the one side, we lock up a former football coach for life for crimes he still doesnt even understand (not that he shouldnt have gotten some time). on the other, we take two of the most sophisticated white collar crooks of our time and let them go free because their crimes are too complicated to explain? you gotta be kidding.
and what of the rest of the enron crew who sold options worth hundreds of millions just before it went to zero? the paper talks about some lady who was famous for running around in mini skirts and stilletos, even lauded as one of the most powerful women in america. she walked with $80m in stock and now splits her time with her bolivian boyfriend between ranches in several states. that's fucking ridiculous. if the SEC (or anyone) ever listened to me, we could right these wrongs faster than bush can say 'wiretap'.
for those who dont memorize every post, i'll remind you of my simple proposal to stop the corporate gravy train. it's so simple it pains me. the SEC adds a rule saying that any insider who sold stock or options during a period of fraud has to disgorge the profits. helloooo!! how fucking simple is that? can anyone guess how much money would have been returned to innocent investors by now? 414 companies restated earnings in 2004 alone.
i'd like to start a running tab of great corporate insider windfalls that could have been reversed without ever proving a thing. (and if someone showed me how to do a wiki spreadsheet we could all add to it.)
first and worst...
gary winnick, global crossing - $600m
john moores and family, peregine systems - $600m
clearly, the SEC works for its bosses at goldman, morgan and csfb who have rich clients to protect. otherwise, we'd hear someone besides me point out obvious rules like this that would really protect investors as opposed to ridiculous window dressing like sarbanes oxley which just punishes all companies and makes it prohibitively expensive for small companies to maintain public status favoring big corruptions, oh i mean corporations, even more.
i do want to point out that if we just shortened corporate corruption to corruptions, we'd say a lot of unnecessary verbage:)