Maybe I am just jealous, but I sure wish I could find a company to work for where I could do a terrible job, lose my employer over two (2) billion dollars and then have the company hand me a check for $160 million dollars as I was being kicked out of my office. For most people in the real world, the way large companies compensate CEO's like Stan O'Neal at Merrill Lynch has long boggled the mind. When regular folks like you and me mess up at work, we are fired and not offered the usual 'golden parachute' perks like multi-million dollar severance packages as a nice pat on the back for losing our company money.
I am a big believer in capitalism and I do believe that on the whole it is the best economic system the world has to offer. That said, there is something basically wrong with rewarding failure in corporate America even though large public companies have been doing business that way for decades. I know little about what Stan O'Neal did and did not do for Merrill Lynch during his tenure as CEO. However, the board of directors did not look favorably on his leadership when he lost the company over two (2) billion dollars in the third quarter of this year alone. From a purely public relations (PR) stand point these types of reward for failure deals that are handed out way too often by major companies sends the wrong message to everyone else that works for the same company.
While the United States has grown into the largest economy in the world by practicing capitalism as our bedrock business principle, there are areas where we could improve the effectiveness of this system of business. The first and most important aspect of true capitalism is the real fear that mistakes and failure can and will lead to certain financial ruin. In corporate America today, CEO's like Stan O'Neal do not face financial ruin if they make mistakes with other people's money, instead they get paid millions of dollars if they do their job right and they could potentially make millions of dollars more if they mess up and get fired for costing other people their hard earned money.
The only way this kind of cancer on the American capitalist system will ever be fixed will be when millions of stockholder refuse to hire CEO that are not willing to risk their own money along with the money of those they work for, the shareholder. Right now, CEO's are winning whether they do a good job or not and that can not be good for the long term interest of business in the United States.
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