The "Greed is Good" ethos--let me get my hands on every dollar possible no matter how many people lose their jobs or how sleazy I look or how bad this is for the shareholders--has not gone away. As I've argued, part of the problem is that, since the financial crisis in 2008, the system has gone after a few little fish but let the big fish get away. For your consideration, the newest installment courtesy of, among others, Jon Corzine.
I'll start with Eugene Isenberg. I know this happens to everyone of YOU, the 99 percent--you give up a job and get paid a king's ransom:
Eugene Isenberg, the chairman and chief executive of Nabors Industries, is pocketing $100 million just to give up one of his two titles. That seems absurd. But the board of Nabors, a $5.3 billion oil drilling company, was hamstrung by an old contract. Even so, the stock of Nabors has underperformed for a decade.
Mr. Isenberg’s princely deal seems particularly odd given that he will remain as chairman even as Anthony Petrello, the longtime No. 2 at the company, replaces him in the chief executive role. There is little in Mr. Isenberg’s record in recent years that justifies the payout.
Of course, a reasonable person would ask how the board was "hamstrung" by this contract. Let's understand a basic fact--one that Graef Crystal, one of the pre-eminent compensation consultants, explained to me at length in my 2008 book, "The Audacity of Greed": CEO contracts are products of cronyism, negotiated and approved by boards of directors that are chock full of hand-picked friends and/or business associates of the CEO.
Isenberg is not alone:
At least three other chief executives are in line for payouts of more than $50 million from "golden parachutes" opened by pending acquisitions, according to a Wall Street Journal analysis of Securities and Exchange Commission filings. Topping the list: Sanjay Jha, CEO of Motorola Mobility Holdings Inc., who could receive $65.7 million as part of Google Inc.'s acquisition of the cellphone maker, according to Motorola's filings.
Four other CEOs could receive exit packages of $30 million or more from deals that are pending or were completed this year. In most cases, the CEOs must leave the acquiring company within one or two years to qualify for the payout.
And I am disappointed, though hardly surprised, that there is not more criticism of Jon Corzine in the progressive-liberal space. It isn't simply his mishandling, to be charitable, of the investments of MF Global Holdings. It's that he exhibited the greedy, self-dealing of the rest of the Wall Street crowd that brought us the crisis. Joe Nocera is right:
The idea that Corzine, who single-handedly destroyed MF Global Holdings, was in a position to command so much as a penny in severance is horrifying. It suggests two things. The first is the extent to which “heads-I-win-tails-you-lose” remains the operative concept for Wall Street compensation. The second is that one’s politics doesn’t much matter when it comes to lining one’s pockets. Corzine is an avowed liberal who has decried income inequality and Wall Street pay — but right up until the end, he had his hand out for millions he didn’t deserve.
And:
Like many executives — on Wall Street and off — Corzine’s agreement also covered his eventual departure. If he left MF Global because, say, it was sold, his $11 million in stock options would immediately vest, and he would get a $12.1 million golden parachute. Of course, the MF Global proxy statement doesn’t call it a golden parachute. It calls the payment “severance.”
There is nothing in the proxy statement about what would happen if Corzine destroyed the firm by making bad trading bets. There is nothing that links his payout to, you know, performance. No matter what, he would be owed the $12.1 million. All he had to do was sell the firm.
That few people in the progressive world are chastising Corzine for his greed is a comment on the bankruptcy of the "professional left"--the same "professional left" that sat on its ass, clueless about what to do beyond holding yet another policy conference (a la "Rebuild The American Dream") and needed a real uprising to erupt called Occupy Wall Street.
Corzine spread his own personal wealth far and wide--to buy himself a Senate seat and a Governor's seat (for a bit), and buy the loyalty of a lot of other Democratic politicians and progressives. Where is the outrage about his behavior that simply bolsters the idea that you can be a hypocrite and pontificate about Wall Street greed, or greed in general...until it's time for you to get in line to fill your pockets.