In the United States today, CEOs increasingly seem to have immunity from prosecution — and common sense. The latest excample comes to us from Atlanta.
Back in 2006, no CEO in the Atlanta area took home a bigger paycheck than Ian McCarthy. The chief exec at developer Beazer Homes USA pocketed $29.6 million, seven times the local CEO average. But McCarthy had to cut his celebration short. In 2007, the Charlotte Observer revealed rampant fraud deep inside Beazer’s operations.
The Beazer board responded by axing some lower-level execs — and giving CEO McCarthy a $600,000 bonus for "communicating" to employees "the importance of compliance" with the law.
Earlier this month, federal prosecutors announced a deal with Beazer that lets CEO McCarthy keep his job and offers defrauded homeowners payback on just a fraction of their losses.
The lesson of this tale? Notes New York Times analyst Floyd Norris: "If a boss can preserve his deniability about crimes committed by his company — perhaps by showing little curiosity about just how the profits are being earned when he is taking in millions from cashing in stock options — then he can escape being held accountable if the crimes are eventually uncovered."
Sam Pizzigati edits Too Much, the online weekly on excess and inequality.