By now, everyone is aware of the continuing saga unfolding at Borders. The latest twist, just reported in Publishers Weekly gives us valuable insight into the underlying sickness that continues to infect our economic engine – greed may or may not be good, but stupid doesn’t go away when you put on a suit and tie.
At a time when rank and file employees are fighting to get their severance pay, their former employer is fighting in court to ensure that the top fifteen management employees get severance bonuses of $125,000 each. To put that in perspective, it’s two and a half times the annual salary of one of their store managers.
What makes them worth so much money and why do we continue to accept such bloated compensation as reasonable? Back in April, Bloomberg reported on how many millions would go to the top five executives based on how much money they could return to the shareholders. Does anyone really believe that executives are worth millions a year?
A surprising number of them turn out to be hopelessly inadequate and got there simply because they know the right phrases and when to use them. They talk about creating value and having passion for the job, but at the end of the day, they make a ton of bad decisions and end up jumping ship with as much loot as they can carry.
To carry the metaphor just a bit further, consider that those large severance bonuses are justified by all their hard work on behalf of the debtors (while employees fight in court for severance pay). It’s little different than the officers of a cruise ship ramming an iceberg and then taking one life boat each, brandishing their flare guns to keep the passengers from joining them.
They like to put their feet up, and they deserve it – don’t they?