View Poll Results: Which scandel has the worst CEO?
Adelphi Communications - Founder John Rigas, his two sons and former assistant treasurer Michael Mulcahey are on trial in federal court, accused of stealing tens of millions of dollars from the cable television giant’s investors to support a lavish lifestyle.
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Credit Suisse - Frank Quattrone, the company’s former investment banking star, is scheduled to be retried in April on federal charges of obstruction of justice, after a trial last year ended in a hung jury. Quattrone made a fortune taking Internet companies public during the dot-com stock craze.
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Enron - Former chief executive Jeffrey Skilling pleaded innocent in February to fraud, conspiracy, insider trading and other federal counts related to the once-mighty energy giant’s collapse. Former chief financial officer Andrew Fastow has pleaded guilty to two counts of conspiracy and agreed to cooperate with prosecutors.
Health South - Fired CEO Richard Scrushy is scheduled for trial in August on federal charges of leading a multibillion-dollar scheme to overstate HealthSouth earnings to make it appear the company was meeting Wall Street forecasts.
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Martha Stewart Living Omnimedia - A federal jury convicted company founder Martha Stewart of conspiracy, obstruction of justice and making false statements related to a personal sale of ImClone Systems stock.
Qwest Communications - Four former executives — Thomas Hall, Bryan Treadway, Grant Graham and John Walker — are on trial in federal court, accused of plotting to help the company improperly book $34 million in revenue.
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Tyco - Former CEO L. Dennis Kozlowski and former CFO Mark Swartz are on trial for allegedly stealing $600 million from the company. The jury is expected to begin deliberations next week.
World Com - Former CEO Bernard Ebbers pleaded innocent Wednesday to federal fraud and conspiracy charges for allegedly directing a massive accounting fraud now estimated at $11 billion. Former CFO Scott Sullivan pleaded guilty a day earlier to conspiracy and securities fraud charges and agreed to testify against Ebbers.
So like I said...isn't this basically a cynical, hate-filled thread? Might not have been your starting intentions, but that's sure what seemed to come about.
Yeah, it's a bad thing, and it's messed up. But do we have to wallow in it?
I work for one of Micro$oft's most visible competitors, and as rapacious as Microsoft is (and fragile and insecure its systems), even I can't bring myself to say that he's at the level of an Ebbers or Skilling!
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"In theory, theory and practice are the same, but in practice, theory and practice are different."
I'm not saying it's not fit for the Water Cooler; basically anything goes here, I know. I'm just saying, is it really a good thing for us to be doing? As pointed out above...just because it's legal doesn't mean it's right (or good for us).
Hi Soldier - while I agree that there's cynicism (and schadenfreude for the ones already convicted), I think this thread is actually very useful. There are far too many people who think that laissez-faire free enterprise is such a perfect system that we shouldn't be on guard for rapacious executives and compliant boards. Since the '80s the ratio of CEO pay to employee pay has leaped by incredible degrees (mostly in the US), and every decade a new set of scams come up. A thread that encourages to remember to be wary of corporate greed and maintain (or create!) effective governmental oversight is very helpful.
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"In theory, theory and practice are the same, but in practice, theory and practice are different."
No, not at all. You're confusing the science with one of the yardsticks it uses to measure economic effects. Money is a convenient proxy for such measurements as price or utility, but the fundamental principles of economics still apply even where it is not used,...
Actually, realistically you can't divorce economics from sociology (Even though the first assumption of Economics is that you can). Any Economist worth his salt will readily admit that the error of human bias taints any analysis to some greater or lesser degree. Money while it may be proxy for systemic metrics, is (with regards to this thread) also a method of keeping score between top level executives; a way for them to count coup. And quite often it has been demonstrated that for these executives, that's more important than actual performance ($M bonuses when losses are declared and Ks of jobs eliminated). The logic that I deserve a bonus because the quarterly loss would have been worse is the same logic that says it's better to be on a sinking boat 1500 miles from shore than on a sinking boat 1600 miles from shore. In either case the boat's sinking and the chance of drowing is a highly likely probability.
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But the benefits of technological advancement and innovation is usually well worth the temporary displacements in the long run. There's bound to be turmoil as factors of production shift to their most efficient and highly valued uses, but the end result has always ( thus far ) been enhanced efficiency, greater average affluence and better lives...
The problem here is that the support of valuation (Stock Price) has become abstracted from what it's supposed to represent. Rather than being representative of ownership in a firm, it has become representative of the value of the firm. This has created a situation where the *perception* of what a company does is (in some cases) more important than (and in some cases quite different than) the goods and services the company actually provides. So decisions made in support of value are not necessarily the decisions that render the best long-term benefits (either sociologically or financially).
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Not to recognize the power of the Titanium Spork is to be in denial.
Actually, realistically you can't divorce economics from sociology (Even though the first assumption of Economics is that you can). Any Economist worth his salt will readily admit that the error of human bias taints any analysis to some greater or lesser degree.
Ah,now you're getting into psychology...
Actually, one of my favorite "economists" ( Veblen ) was really a sociologist; and originally economics and political science were one field, political economy; but given the modern mania for specialization....
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Money while it may be proxy for systemic metrics, is (with regards to this thread) also a method of keeping score between top level executives; a way for them to count coup.
I don't know about that; so much of their compensation these days seems to be in unquantifiable forms such as options...and what good is competition if your scores are kept at least partially secret?
I also note with some amusement the tendency to think of enormous executives' compensation as outrageous, but an actor getting $20 million to do a movie is shrugged off or even justified in terms of value given...same for people like hip hop and rock stars and basketball coaches. Wierd.
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The problem here is that the support of valuation (Stock Price) has become abstracted from what it's supposed to represent. Rather than being representative of ownership in a firm, it has become representative of the value of the firm. This has created a situation where the *perception* of what a company does is (in some cases) more important than (and in some cases quite different than) the goods and services the company actually provides. So decisions made in support of value are not necessarily the decisions that render the best long-term benefits (either sociologically or financially).
Yep. But of course we're not really talking about economics here so much as management and marketing...
Actually, I've always thought it was closer to philosophy...!!!
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I don't know about that; so much of their compensation these days seems to be in unquantifiable forms such as options...and what good is competition if your scores are kept at least partially secret?
Two words, Inq...."Net Worth" and you don't even have to figure it out for yourself because Fortune (or is it Money) Magazine will do it for you if your in the top echelon.
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I also note with some amusement the tendency to think of enormous executives' compensation as outrageous, but an actor getting $20 million to do a movie is shrugged off or even justified in terms of value given...
Nope. I find that equally ridiculous if not more so. Is the above evidence that the American Consumer is hopelessly undisciplined? Is the World Consumer becoming more-so? A recent piece I heard lately that was saying the upcoming generation of Chinese kids is very brand-conscious and very down on knock-offs would seem to at least partially support that.
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Yep. But of course we're not really talking about economics here so much as management and marketing...
At the level of any one company, yes. But viewed from a wider perspective as a trend, or as a behavioral pattern in the management of the American firm and it's economics, it raises a whole plethora of issues. Say for instance Brazil creates an incentive for American Companies to relocate their corporate headquarters in Sao Paulo, thus removing jobs and taxes from the US. If half a dozen high profile companies choose to do so it's a good news story. If half the Fortune 500 defect it's an economic disaster.
The US Private Sector and the US Government are (and have always been) in an unholy tango of selective insularity. The rest of the world (fortunately for us) pretty much is too. And it's a good thing for us, because the ultimate overriding Economic Principle seems to be what it always has been....
|..| This Much Stuff
| .................................................. ..............| This Many People
__________________
Not to recognize the power of the Titanium Spork is to be in denial.
The US Private Sector and the US Government are (and have always been) in an unholy tango of selective insularity. The rest of the world (fortunately for us) pretty much is too. And it's a good thing for us, because the ultimate overriding Economic Principle seems to be what it always has been....
|..| This Much Stuff
| .................................................. ..............| This Many People
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