Hold CEO responsible for huge energy losses
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“Liberty and Justice for All”
Since: Oct 08
#1 Oct 21, 2008
While I sympathize with the author's position, a little perspective is in order.
1) The nature of the current conditions is such that, on average equity prices in the Dow have fallen by more than a third since their high within the last year.
2) When Shattuck took the reigns of CEG in October 2001, the stock price was $22.37. It closed yesterday at $24.90.
3) The nature of Mr. Shattuck's severance agreement was determined as part of his compensation contract (in the absence of which he would have a legal claim to still more) so it is not a "reward".
4) Mr. Shattuck has waived the $18 million severance and it will be donated to charity.
I cannot attest to the nature of Mr. Shattuck's actions as head of CEG or how much they were driven by foreseeable market activity as opposed to the meltdown of the financial sector. What I can say is that it is necessary to look at such things rationally and in context instead of merely lashing out.
#3 Oct 21, 2008
This is what has become of American capitalism. Corporate executive long ago left behind responsibility and accountability, Socialism for companies and their executives; when the public is made to suffer the faults of capitalism.
They and their corporate brethren own the compensation committees and ensure that pay packages only go up and never down. Ask yourself why, even when fraud is proven, their employment contracts never allow for regaining their ill-gotten bonuses? Shattuck, unfortunately, was no different than most incompetent, over compensated executives ... he just crashed and burned more spectacularly.
“Liberty and Justice for All”
Since: Oct 08
#4 Oct 22, 2008
"This is what has become of American capitalism. Corporate executive long ago left behind responsibility and accountability..."
Which, of course explains by the overwhelming majority of companies in this country perform well (in the absence of government intervention) making the US one of (if not the) most prosperous countries in the worl. Oh, I guess it wouldn't.
"Socialism for companies and their executives..."
Socialism for companies is, alas, all to frequent. Socialism for executives is all but unheard of. Instead must executive pay deemed "outrageous" is, in fact, either compensation actually earned in previous years (the exercise of options) or compensation for breach of employment contract (as in the case of Shattuck).
"...when the public is made to suffer the faults of capitalism."
Had capitalism had the slightest thing to do with the crises that make the public suffer, perhaps that statement would have had merit. The current crisis was entirely of the government's making: Fed policies that flooded the economy with liquidity along with false security provided primarily by Fannie Mae and Freddie Mac created irrational unsustainable markets.
"They and their corporate brethren own the compensation committees and ensure that pay packages only go up and never down."
CEOs face firings at a rate greater than for other positions and, in fact, average total compensation in real dollars has consistently risen for everyone.
"Ask yourself why, even when fraud is proven, their employment contracts never allow for regaining their ill-gotten bonuses?"
The question is invalid since actual proof of fraud breaks those same employment contracts (eliminating any right to severance) and makes the individual subject to suit for damages. The liability is the same for any employee caught with his hand in the cookie jar - you can't take back his last paycheck but you can go to court for restitution.
"Shattuck, unfortunately, was no different than most incompetent, over compensated executives ... he just crashed and burned more spectacularly."
Assuming that Shattuck's demise can be attributed to "incompetence" (which may be the case but may also be due to market conditions - again, created by government - that were out of his control), the idea that this case is in anyway similar to the condition of any significant percentage of corporate executives is so at odds with actual reality, it is hard to take such an attack on them seriously.
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