Book ‘em, Danno
I believe that there are still standards of justice, ethics, and morality that matter. Corporate greed, it appears, trumps all. Our locally-based international airline, Northwest Airlines, is slated to come out of bankrupcy over the next week or so. Relations with the pilots, flight attendants, and mechanics are utterly in a shables. Pilots have taken a 40% pay cut just to be able to keep their jobs. Recently, NWA gave Chairman Gary Wilson a $2million gift (the firm has not called this a bonus), and local media reported other bonuses for executives that, by my estimation, ran upwards of $25 million dollars.
In the words of M. Ward, “Why burn your bridges when you can blow your bridges up.”
Boards of Directors are frequently driven by a good-ol’-boy mentality summed up by the adage “you scratch my back and I’ll scratch yours.” This is particularly true in this part of the country, where there is a good deal of in-breeding in local boards. Raises, bonuses, and stock options get voted for simply because board members want those same perks from the organizations where they lead–and the executives that they vote to reward often also sit on their board of directors (Admittedly, there were no immediately obvious connections on the NWA board–many of the board members are from privately-held companies, or former members of State and Federal government).
The upshot of all this is that greed, rather than good sense, wins out. According to Minnesota Public Radio, two of the three union-held positions on the board have been eliminated, and the firm has managed to save $1.4 billion dollars through hard negotiation and contract concessions.
Yes, in the big scheme of things, $2 million — or even $25 million — is pocket change to a company like NWA. The truth is, however, that such numbers make a powerful statement to employees and unions. Leaders need to consider this before they line their own pockets.
While I generally consider myself a conservative, this is one of the places where I draw the line. If our justice system doesn’t leap on this like a pack of dingoes on a carcass, that system, too, is hobbled. Leaders of publicly held companies hold a public trust, and the board at NWA have broken that trust. What we do as leaders has meaning, and we all need to be held accountable.
Without a public apology and some recompense to the stockholders and employees, I think some of the decision-makers need to face legal sanctions. We have our own little micro-Enron here, and the self-serving leaders have no clue how to lead their organization into the future. Oblivion, yes. Future, no.
And so, in the final words of every episode of Hawaii-5-0: “Book ‘em, Danno.”
May 16th, 2007 at 9:44 am
Well said, Sam!
I also find it disturbing that corporate compensation is often totally disconnected from the pulse of its stakeholders (which should include employees and customers) AND market conditions (which should include bankruptcy or economic downturns).