Post-Enron, the world has not remained the same for corporate America. With a string of corporate collapses in recent times, which witnessed big names like Enron, WorldCom, and Global Crossing, the issue of executive excesses comes haunting in. The executive malfeasance, for the worst, has seen hundreds of thousands of employees lose their jobs and their lifetime savings as retirement plans turned awry with companies going bust. In the case of Enron alone, several thousand employees lost 70 to 90% of their retirement savings after the company announced earnings restatement last October. As its once high-flying stock crashed from a peak of $84 a share to less than a dollar in a year, Enron's workers watched their retirement accounts plummet from million-dollar highs to less than a year's salary!
In fact, in the aftermath of Enron, cases of executive excesses in America have come to light. From WorldCom (where its Chief Financial Officer Scott Sullivan sold $45.4 mn in company stock while the company declared bankruptcy and cut 17,000 jobs) to Global Crossing (where while the company was losing $9.2 bn and eliminating over 5,000 jobs, its Chairman, Gary Winnick, was pocketing $951 mn in stock option sale and other benefits), the stories of executive bad practices tell a sordid tale about the plight of millions of employees and investors at the hand of those corporate crooks.
The sources of these windfalls, as Congressman William D Delahunt points out, are now-familiar devices such as retention bonuses, severance payments, forgiven loans, proceeds from stock options and dividends on holdings of company stocks. Surprisingly there have not been any sincere attempts by the government or regulatory bodies to curb the menace. Against this background, it is imperative that the government initiates proper actions and carries out far-reaching reforms in areas of executive compensation, employee retirement plans i.e., employee pension, and safeguarding workers' interests in cases of corporate bankruptcy, so as to put an end to the growing culture of greed and malfeasance. |
