HOW TO BECOME A TOTAL FAILURE

My little blog last time about Prudential Financial showed up in Google’s top four. That’s good news and that’s bad. The good news is that the corporate executive cancer of greed gets a better chance of being exposed, but the bad news is that not enough people are writing about it. If my teeny-tiny voice is the only one denouncing them, nothing will change.

I did, as a Prudential stockholder, vote my proxy ballot. They thoughtfully allowed me to vote over the Internet. That’s very cool. I wish our elections for public office were that easy. Again, the gnat-sized weight of my vote won’t sway anything, but it made me feel good to vote no on every single one of the board candidates. Why did I do that? Well, I think that if the board is recommending that the shareholders reject the oversight of their compensation then none of the SOB’s should be in charge. They don’t want anybody telling them how much they can steal from the company! (Rule No.4 http://www.tenwaystofail.com/blog/?p=3#more-3 ) All pirates are not on the high seas. There are plenty of pirates in boardrooms. They turned in their eye patches and peg-legs for designer suits and $500.00 ties, but they be pirates none-the-less!

Oh, you think I’m going overboard, do you? Let’s look at the facts. For the year 2008, Chief Executive John Strangfeld took between $14 million and $16 million dollars in salary and other compensation. Now what did John Strangfeld accomplish to be worthy of such a grand bounty? Under Mr. Strangfeld’s $14 million dollar leadership, Prudential Financial Inc. posted a net loss of $1.1 billion dollars. That’s right. His management may not have been totally to blame for the loss, but where does the buck stop?

In the real world where the rest of us live could we even in our wildest dreams imagine a scenario where we could lose a large sum of money for our employer and be rewarded like this? Can you say fired?

Maybe we should put corporate executives, anyone with a VP behind their names, C anything, or any board member, on commission. After all, they are an insurance company, and they employ agents to sell their products who have to live on commission. Why not them? Maybe if all executive compensation was just commission, they would try harder to make sure their companies were successful. If that happened we wouldn’t have to walk the economic plank again. We already know that we can’t depend on their honor, but we can depend on their greed. Tie their earnings to the earnings of the company, and then let’s see how they do. The company thrives they thrive, if the company sinks, they sink. It needs to go both ways.

I’m not saying that they should be paid nothing, what’s wrong will a reasonable salary? What’s reasonable? I don’t know maybe a quarter million a year. I think if you offered  that sum to most Americans, they would be very happy indeed.  But don’t forget under John Stangfeld’s watch the company l…o…s….t a staggering $1.1 billion dollars. What would happen to Joe average American citizen who lost his company a tenth of that? They certainly wouldn’t get a bonus.  In John Stangfel’s case maybe two-hundred-fifty-thousand is too excessive–what do you think?

While we are at it, why not do the same with Washington bureaucrats? If you head a department of government that costs too much to operate, your salary gets cut. Serve the people’s needs profitably, and you get rewarded. Fail to produce and your income gets docked. Tit for tat. What’s wrong with that?

Perhaps this system should also apply to all government workers, not just the bureaucrats. I was talking to a fellow employee at a printing company a few years ago who came there after a stint working for the Salt Lake County Tax Commission, in Utah. She was a self-starter who took pride in her accomplishments. Everyday she received a pile of work to do. Everyday she was finished in two hours–max. Was she amazing? Not according to her. She was merely efficient. The other public “servants” became extremely annoyed with her because she was making them look bad (Rule 9, http://www.tenwaystofail.com/blog/?p=3#more-3). “Why couldn’t she make her work stretch the whole eight hours like they did,” they wondered.  She filled the rest of her time with reading. She was finished, why not? Oh no, that wouldn’t do. The powers that be would notice, and give her additional work. That sounded like a good idea to my friend. Nothing is more mind numbing than watching the clock tick, tick, tick, for six boring hours a day.

“But,” they said, “if they think we could do more, they might decide we don’t need this many people. Our jobs could be in jeopardy.”

In the end her fellow public servants made it psychologically impossible for her to continue working there. She was forced to quit and they probably went out and found two or three more people to take her place–all at taxpayer expense. Dosen’t it just make you proud to know that 50% or more of everything you earn goes to supporting this wasteful system? Our money isn’t just wasted it is sacrificed. They might as well build a Burning Man effigy in the desert out of our tax dollars for as much good as we get from them.

Written by Bill Ruesch blog author of Talking Through My Hat, A Print Broker’s Ruminations www.billprintbroker.com