Psssst, Wanna Buy My Corporation?
A lucrative provision in CEO contracts encourages corporate chieftains to sidle up to their competitors.
Where’s Charles Dickens when we need him? The novelist, who laid bare the shame of gross income inequality in 19th century England, came up with some perfect names for his more despicable characters, including Scrooge, Mr. Tulkinghorn, and Miss Havisham.
So I’m wondering what moniker Dickens would’ve given to Robert Marcus.
Who? He’s the CEO of Time Warner Cable who already won gold in the 2014 Greed Olympics for grabbing the most cash with the least effort in the shortest time.
Marcus became chief of the cable company on New Year’s Day. He immediately reached out to his corporation’s biggest rival, Comcast, offering to sell Time Warner Cable to the giant. Only six weeks later, the deal was done.
Why would a CEO rush to eliminate both his corporation and his own job? Perhaps because of a lucrative little provision in the contract he signed to become Time Warner’s honcho. It’s a CCC — a “change of control clause.”
This is yet another way for CEOs to feather their own nests, for that kind of clause hands a big golden parachute to the top executive of a corporation that gets sold.
In this case, Robert is pocketing $80 million. Yes, that’s roughly $1.8 million a day for each of the 44 days he “worked” to sell off the company.
What we have here is a perverse form of incentive pay for corporate chieftains. Rather than rewarding them for out-competing their rivals, a change of control clause encourages CEOs to sidle up to their competitors and whisper: “Psssst, wanna buy my corporation?”
Not only did Marcus sell off Time Warner, but his self-serving deal will also sell out untold numbers of its employees who’ll be made “redundant” by the merger.
We hear about America’s growing income inequality gap, but here we can actually see it widen: One rich man is gaining an extra $80 million while hundreds of workers will lose their jobs.
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