Conscious Choice: Rewarding Failure

December 2000 | Hightower Lowdown

Rewarding Failure

by Jim Hightower

In the name of cutting costs, getting more efficient, and "streamlining," corporate CEOs are on another firing binge, dumping hundreds of thousands of American workers this year. Yet, have you noticed, these same CEOs are upping their own pay, getting fatter than butcher’s dogs?

Here’s a novel idea: What if CEOs actually had to do a good job before getting a pay raise? That would sure spoil the fun of, for example, Ed Whitacre, Jr. Ed’s the big honcho at SBC Communications Inc., our country’s largest "local" phone company. In a surge of merger-mania, SBC has snapped up control of local phone service in thirteen states and several foreign countries, now advertising that SBC is "your friendly neighborhood global communications company." I’m not making that up!

In the process of merger-mania, not only has SBC jacked up people’s phone rates, but it’s also made a mess of phone service. Customers are waiting weeks to get a new phone installed...and forget about repairs. As a Michigan business customer who had his phone disconnected for three days told Associated Press, calling for service was a joke: "You might as well give up your afternoon," he said. "It’s impossible to get a live person, much less someone who cares."

SBC executives blame "a smaller, less experienced workforce." Hello! Who fired over 5,000 experienced workers when SBC took over these local companies? Not surprisingly, with higher phone bills and less service, SBC’s stock price has taken a nine-percent dive in the past year.

But did Ol’ Ed take a hit for all this management mess? No! In addition to his salary, Ed got a $6 million dollar bonus, plus a stock payment of $6.5 million, and a $5.3 million "special bonus and retention award."

If you can get $18 million a year for firing workers, raising rates, cutting service and losing value for stockholders — why should any CEO give a damn about doing a good job?

Jim Hightower is a columnist and author. To subscribe to The Hightower Lowdown, send $15, and your name, and address to: Lowdown, P.O. Box 20596, New York, NY 10011. Visit his web site for more info.

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