Forum Post: Modern American Career Executives Are Lazy and Lack Talent

Sounds like an outrageous statement, but it's true and here is why: modern career executives, unlike founding company entrepreneurs, maximize shareholder profits by using two of the easiest formulas to create profits and those two formulas are the worst for society: 1) squeeze employees and 2) mergers. Most career executives lack the talent to create profits through innovation or creation. They lack the talent to create profits by creating new and better products and services.

Instead, they create short-term shareholder profits by squeezing their workers. They know that they can increase profits by laying off more workers and making the existing workers pick up the slack. Hence, American worker "productivity" levels are at an all time high. They do this even if they are turning a profit, to turn an even larger profit.

They further squeeze their workers by stagnating their wages for over 30 years. Although executive salaries have ballooned 256% in the last 30 years, middle class wages have stagnated.

And they further squeeze their workers for more profits by moving more and more of the benefit costs onto the workers. They not only have not increased middle class wages in over 30 years, but they have made the workers pay more and more of their own healthcare and retirement benefits.

The second formula that they use to increase shareholder profits (and their compensation since it is tied to shareholder profits) is through mergers. Studies show that 70% of all corporate mergers fail, yet executive do them. Why? Because mergers trigger higher compensation packages for them and short-term shareholder profits because there is a stock up-tick when there is a merger.

What do mergers do for the workers and society? They result in the loss of middle class jobs and the ruin of two formally successful companies.

Furthermore, executives are the only workers in American who are paid handsomely for failing spectacularly. You fail as an American CEO, you get a golden parachute, for example, the Home Depot CEO made $210 million for failing. That $210 million could have gone a long way to increase worker salaries and benefits, but it instead enriched one man for failing.

So American CEO's get to work and quit taking the easy way out. Make profits by building, creating, investing, and innovating instead of cutting, squeezing, merging, and profiting from failing. And by doing so you will make America great again instead of ruining America's future.

www.foxnews.com/story/0,2933,240987,00.html http://money.cnn.com/2007/01/03/news/companies/home_depot/index.htm http://www.pay-without-performance.com/Preface%20and%20Introduction.pdf http://blogs.hbr.org/ashkenas/2010/06/rethinking-the-assumptions-beh.html http://www.nytimes.com/2011/10/01/business/lets-stop-rewarding-failed-ceos-common-sense.html?_r=1&ref=executivepay http://money.cnn.com/2011/02/16/news/economy/middle_class/index.htm http://www.dailyfinance.com/2010/11/23/record-corporate-profits-are-coming-out-of-workers-hides/ http://www.slate.com/articles/business/moneybox/2011/03/more_profits_fewer_jobs.html

http://www.bowne.com/securitiesconnect/details.asp?storyID=1495 http://www.bowne.com/securitiesconnect/details.asp?storyID=1815