If I understand your point, we don't disagree about much. Thinly-veiled threats by management to AMR employees that they should overlook the indecent golden-parachute grabs by dissembling executives or the company will go bankrupt, if anything, is further evidence of utter incompetence at the top. Not to mention venality. What AMR's CEO and board have done is not that far distant from a highwayman's "Give me the money or I'll shoot you."
My main quarrel is with directors paying executives and managers outrageous compensation packages. Period. It has become infectious on Wall Street. It needs to be stopped.
In good times, defenders of these ridiculously inflated salaries, options, and perqs claim the executives and managers are responsible for the company's good performance and should be rewarded like royalty. In bad times they defend the same damn ridiculous salaries and perqs by claiming it wasn't the fault of those same executives and managers. It was the economy, or the business cycle, or the weather, or whatever. And if they aren't paid more, they'll quit.
I say, let 'em go. Truth is, a great many of the managers of publicly listed companies are not as good or as personally responsible for company performance as their modern-day compensation packages would imply. Ironically, it's almost the reverse. The best of executives, like Warren Buffett ($100,000/year - no options), encourage their boards to limit executive salaries and perqs. One reason for this is they know how very important to a company's success good employees are up-and-down the line and they make sure everyone is suitably compensated and not just the dodos at the top.
That is a lesson in management -- lead the work force by example -- that hasn't sunk in with AMR executives. As Buffett recently said, the epidemic of grossly inflated executive compensation packages has spun out of control. It needs to be stopped. If that takes an unhappy work force angry at being misled by self-aggrandizing executives, so be it. |
