According to recently released documents, former Chairman and CEO of energy giant Enron Corporation Kenneth Lay was paid $153 million, including an $81.5 million loan, as the stock price of the company plummeted and it chugged towards bankruptcy. Let us set aside the question of what an individual would do with a $81.5 million loan buy a really nice gift for his child's birthday - a small African nation, perhaps, or a trip to Mars).
It's easy to understand why some people were outraged by the news. I would have happily bankrupted Enron for a tenth of what Lay was paid. That's right - 10 cents on the dollar, a mere $15.3 million. A bargain at twice the price.
Actually, Enron isn't the best example; its Byzantine structure of shell companies is far too complex for my taste. I prefer a more traditional approach to destroying a corporation: borrowing large sums of money to buy other companies whose core business isn't especially compatible with our core business, then defaulting on the loans when our stock price drops. Sometimes, the old ways are the best.
Take telecommunications company Qwest, whose chairman and CEO, Joseph Nacchio, had an annual salary of $1.5 million, with a target bonus of $3.75 million. And, I am not even going to mention the long-term incentive pay of $24.3 million. He was fired because the stock price dropped from $60 to $4, moving credit rating agencies to slash it to junk status. Now, all I know about the telecommunications industry is what I read in the papers, but I feel confident that I could have reduced Qwest stock to junk for a salary of $150,000 and a $375,000 bonus.
You may be wondering what qualifies me to financially destroy healthy companies. Fair question. I believe I am uniquely qualified. For one thing, I have absolutely no training in economics. For another thing, I have never run a lemonade stand, let alone a multinational corporation. In addition, you have to factor in the fact that I am highly skeptical of corporate capitalism (I suppose you could call me a social democrat if you were into the whole "label" thing.) This combination of ignorance and malice makes me the perfect candidate to run any major corporation into the ground - and keep it there.
I would be delighted, if possible, to stay in Canada. I could, for instance, have easily destroyed Nortel Networks Corporation's value for a fraction of John Roth's $70.8 million 2000 paycheck, and had time to build massive amounts of debt for Ontario's Hydro One, Incorporated for far less than the $2.2 million salary and $6 million severance package and $1 million annual pension that CEO Eleanor Clitheroe received. Be aware, though, that I insist upon being paid in American dollars; corporate destruction on this scale must be properly rewarded.
If that doesn't work out, I would be happy to travel. To France, say, where Vivendi Universal's Jean-Marie Messier was to receive a bonus of 250% of his base salary of E5.2 million in a year when his company reported the biggest loss in the country;s corporate history: E13.6 billion. That's a payment of approximately $18 million for a loss of about $19 billion. Who says the Europeans can't compete? Still, I could easily improve upon that executive compensation to corporate loss ratio.
I offer two fundamental packages. In the first - the Basic Package - I offer the same loss as any higher paid CEO. In the Deluxe Package, for twice the price (still a considerable saving over the competition), I will compensate for the loss of a large CEO payout by increasing the company's losses, so that the net loss to the company will remain the same. Despite the fact that it makes absolutely no financial sense, several Boards of Directors have jumped at the Deluxe Package. Clearly, somebody should get these people a calculator.
Some of you may still cling to the idea that a CEO is supposed to run a company for the benefit of the shareholders. In response, allow me to say this: GET WITH THE NEW ECONOMY! Steady growth and reasonable profits are out! Plummeting shares and bankruptcy are in! If you do not have a corporate head who can ride this wave of economic destruction to its lowest pointing - enriching him or herself immeasurably in the process - you are erecting a huge sign that points to your headquarters and says: "This is not a hip, happening company."
Competitive rates for destroying your corporation - isn't that what capitalism is all about?
