Tuesday, May 4, 2010

Private Rewards, Public Expense

I’m an idiot. Let’s get that straight right off the bat.

A pure, two-plus-two-equals-three moron. If I were anything else, I’d be rich. Or at least well-off. Because in America, the perception is brains equal cash. And since I’m broke, well, it couldn’t be more clear: I am a retard.

This is likely the reason I don’t understand business.

In contrast to their twentieth-century counterparts, twenty-first century executives seemingly exist only to eliminate jobs. Shut down factories. Close offices and distribution centers. Freeze salaries.

Business calls it cost-cutting. Belt-tightening. And my favorite, restructuring. They use the royal ‘we’. A lot. But what is rarely made clear is whose belt will be tightened. (Hint: Look down.)

As a random, out-of-the-blue example, Wausau Paper CEO Thomas Howatt serves nicely. Ol’ Tom scored a nifty 80% pay raise last year, something I doubt very many people did in 2009.

"How?" you ask.

First he eliminated 1,000 jobs. Then he froze salaries (which is a tad ironic when you consider his). Then he sat back and waited for the cash tsunami to roll in.

When asked about the questionable impact enormous executive pay raises have on workforces where salaries (where they even still exist) have been stagnant, and about being rewarded for tossing thousands onto public relief rolls, crafty Tom sniffed “I probably look at it a bit differently.”

Like I said, I’m an idiot. But shouldn’t we expect just a little bit more of our extravagantly-compensated captains of industry than payroll slashing? Do we really want to reward this behavior? Especially in a consumer-driven economy?

I have nothing against wealth. We all need our carrots, don’t we? What I have a problem with is rewarding job cuts. Isn't this is the kind of short-sightedness that has made fortunes for our national optical chains?

I think it's great that America’s CEOs have a new revenue stream to frolic in, especially with summer approaching. But I would warn them not to become too accustomed to it.

Because what happens when the only job left to slash is theirs?

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