- Jeffrey Bezos – Amazon CEO – Ranked #1 in performance; Ranked 470 in pay
- John Hammergren – McKesson CEO – Ranked #1 in pay; Ranked 121 in performance
If only companies were all run by people like Jeffrey Bezos, our economy would probably be much healthier. The average CEO now makes approximately 231 times what the average worker makes. Do they work harder? Not a chance. Do you want to know a secret about executive compensation? It’s rigged. Executive pay is somewhat complicated, but it boils down to the two things. The CEO’s pay has to be approved as “fair” by the board of directors, and it is sometimes determined by outside consulting firms. The fun part is that many CEO’s serve on the boards of the CEO’s that serve on their boards. This means all of these buddies get to approve each other’s compensation packages. If your friend approved a ridiculous increase in your pay, would you turn around and deny his? I doubt it. The companies who use outside consultants are just as fun. The companies who do the consultations are often used by the company in other areas of consultation. So, if they refuse to recommend a generous compensation package for the CEO, they may be looking at the loss of a lucrative contract down the road.
***Getting back on topic.***
So how does this relate to Romney? A very significant portion of executive compensation is based on stock and non-salary benefits. (Remember this the next time you praise any CEO for giving up a million dollars of salary for a cause. They are still getting millions in compensation.) This is where Romney and his boys at Bain made their money. They would purchase stock in these companies. They would work very hard to find ways to improve profitability. In most cases that involved reducing the average worker’s benefits, laying off employees, and streamlining costs in any way possible. These companies would incur great amounts of long-term debt, but their short-term results looked great. This drove the price of the stock way up. When the executives felt that their value was at its highest, they could then sell the stock and make hundreds of millions in profits. As they relinquished command of these companies, they could wash their hands of a company that had mountains of debt. Then, in a few years, when the debt became insurmountable, the company would fail or file bankruptcy. The Bain executives would get to claim that they had no hand in this problem because they sold out years ago. They tend to forget that they put the company in the position in the first place. For a man who is making his run for office based on the idea that he will reduce the budget deficit, this doesn’t seem like the best approach. So yes, Mitt, you did make a great deal of profit. However, as President Obama said, as President “your job is not just to maximize profits.” If Romney’s history holds true, he will streamline government by cutting jobs and increasing profitability. Then, right before we fall into a terrible economic downturn, he will cut and run.
How will he do it? Let’s look at his economic and job plans. From his own job plan, I take the following:
That leads me into my next problem with Mitt Romney’s plan for the economic future of the U.S. He has a history of hurting the average worker. Not only did he work to reduce pensions and benefits for workers in an effort to increase the bottom line, Bain owned companies that were pioneers in the outsourcing trend. This was done while Romney was actively running Bain. Romney recently stated that “[China has] been able to put American businesses out of business and kill American jobs.” Really, sir? And who has been helping them do that? When President Obama remarked about the obvious hypocrisy in his stance compared to his track record, Romney could only reply with “President Obama confirmed today that he will continue his attacks on the free enterprise system…My campaign is offering a positive agenda to help America get back to work.”
No, sir. I believe that he was attacking the fact that you are a hypocrite who will say whatever you think people want to hear. While this is not really unusual for a politician, the fact that you are loudly basing your platform on the fact that you are a successful businessman, but your success has been at the expense of the American workers, you lose all credibility. When you tell us that you will create jobs, but plan to eliminate almost half a million jobs when you take office, you are a liar. When you refuse to answer the many questions raised about inconsistencies in your history and platform, you are a coward. A good businessman? No. A profitable businessman for yourself and a few investors? Yes. But, who are the investors in this situation? Romney would have you believe that it’s the American people. Wrong. The PACS are the investors. They are the ones working so hard to get Romney elected. They are the ones who would benefit from his presidency. We are the ones who would pay the price.
You don’t have to like Obama. You don’t have to agree with everything he says or does. Economic recovery and job growth have been slow and agonizing, but it is growth. We are adding jobs and increasing GDP. To put a man with a record of destroying jobs, outsourcing, and creating huge profits on the backs of the American workers in the Oval Office is tantamount to middle class suicide. We know what we will get with Obama. More work towards recovery and growth. What will we get with Romney? Richer executives? A weaker and smaller middle class? Fewer jobs? How can this possibly be a better option than the recovery we’re experiencing now?