Executive thievery wrecks people’s lives

by JIM HIGHTOWER

JIM HIGHTOWER

It has taken more than two years, but an example of irrational CEO greed has finally been hit with a small splash of rationality.

In 2005, a “corporate turnaround specialist” named Robert Miller was brought in as CEO of the Delphi Corporation. Due to mismanagement and an accounting scandal involving various top executives, the auto-parts giant was reeling and shareholders saw their investments crashing. Rather than clean out the executive suite, however, Miller made others pay the price. He put Delphi in bankruptcy, slashed blue-collar wages by two-thirds, ended health care payments for retirees, and moved jobs offshore.

Oh, and one more thing: Miller quietly set up a golden pay package of $87 million in cash bonuses to be paid to top executives when Delphi came out of bankruptcy. As one worker put it after word of this money grab leaked out: “You feel like throwing up.” But two unions UAW and CWA didn’t just toss their cookies, they threw up a legal challenge in bankruptcy court, demanding that this giveaway be justified. Of course, it could not be, but that rarely stops corporate-friendly bankruptcy judges from rubber-stamping executive excess.

Not this time, however. Judge Robert Drain grilled the compensation consultant who came up with the $87 million figure, forcing him to admit that this number really was not the product of any rational calculation.

Instead, it had essentially been made up.

As a result, the judge said he would OK Delphi’s exit from bankruptcy only if the executive bonuses were cut by $70 million. Delphi agreed.

Why these executive thieves who wrecked so many lives should get a penny is a mystery to me, but at least this case shines a light into corporate inner sanctums, revealing that top executives shower themselves with wealth for no reason—except that they can.