Tag: Corporatocracy

Sacrifice for Thee, Vast Wealth for Me | Epsilon Theory

From 2014 – 2019, the same years that CEO and Chairman Doug pocketed $200 million in real money stock-based comp, American Airlines had *negative* free cash flow of $3.2 billion.

And took on an additional $14 billion in debt.

And bought back $13 billion of its stock. How did all this work out for American Airlines shareholders from 2014 – 2019?

Over this six year period, AAL stock was up 13%. Not 13% per year, but 13% over SIX YEARS of the best bull market in history.

Barf.

Source: Sacrifice for Thee, Vast Wealth for Me | Epsilon Theory

This kind of thing is happening all the time. The system of government we have is no longer a democratic republic. It’s a corporatocracy. It’s a return to a modern version of feudalism. The C-levels of our largest corporations are the land-owning royalty, and “employees” work their “land” to be protected from our profit-seeking health care system. Whatever these executives want to do to increase their personal wealth and standing, no matter the harm to the company’s long-term prospects, or its employees and their long-term prospects, is fair game.

Meanwhile, the government has become a modern version of the Catholic Church, weaving their cross-“country” influence to help pick and choose their preferred benefactors in this version of clashing medieval kingdoms. The “priests” of this “church,” blessing the armies of these border skirmishes, are mostly geriatrics, who tend towards narcissism, and have a hard time connecting with the concept of what these battles will leave the field looking like for the next generation.

The American experiment in democracy has ended. Corporate power and political influence, expanded by the Citizens United ruling, has officially killed it. Right now, Congress is holding hearings on anti-trust against companies like Facebook and Google, but we all know how this circus will turn out. If penalties are applied, it will amount to a slap on the back of the hand. If actual regulation is enacted, it will be written by the lobbyists, and actually help the company is was supposed to limit, by hurting their competitors more. And the fact that we can know both of these things with perfect certainty, based on lots of previous (in)action, tells you everything you need to know about regulatory capture.

And all the time this is playing out, the emperors of our “free” press have us arguing about personal political and religious differences. They took the turkey while we were pulling on the wishbone.

Boeing CEO Dennis Muilenburg Will Walk Away With Millions – Barron’s

What’s more, upon termination Muilenburg can walk away with another $30 to $40 million. And his supplementary executive pension is worth another $11 million, according to these statements.

Source: Boeing CEO Dennis Muilenburg Will Walk Away With Millions – Barron’s

Welcome to the corporatocracy of America, where you can fail badly enough as CEO to get fired — but not be held legally culpable — and then be handed tens of millions of dollars to get lost.

Then you get to go sit on the boards of several other public companies, and get millions a year from each one to show up to a few meetings and rubber stamp corporate documents.

It truly is a good-old-boy’s club. Hey, it’s a tough job, but someone’s got to do it.

Warren on our Corporatocracy

I’ve been talking about corporate charters for a long time now, and people either don’t understand what I’m talking about, or think I’m crazy. We give people a charter to create a company, which grants them special, legal protections to build the business. But that charter implies a social contract that they will not abuse the public trust, in exchange for that special treatment.

This has been a sort of gentleman’s agreement, that corporations — as legal “people” in the campaign finance definition — would be good “citizens.” In modern America, many simply haven’t been, and it’s time to hold them accountable, and make them give back to society in a more equitable way. Global-spanning companies shouldn’t be allowed to continue to “socialize the costs, and privatize the profits.”

Just yesterday, Mark Benioff, CEO of Salesforce, wrote an op-ed in the Times saying much the same thing:

“To my fellow business leaders and billionaires, I say that we can no longer wash our hands of our responsibility for what people do with our products. Yes, profits are important, but so is society. And if our quest for greater profits leaves our world worse off than before, all we will have taught our children is the power of greed.

It’s time for a new capitalism — a more fair, equal and sustainable capitalism that actually works for everyone and where businesses, including tech companies, don’t just take from society but truly give back and have a positive impact.”

These people face perhaps the toughest uphill climb possible. The world of corporate governance is a private club, where executives of one huge, public company might sit on the boards of a dozen others, all interconnected. They’re used to getting their way, because, in aggregate, they use their money to influence local, state, and federal governments, to make things easier on themselves, and tougher on their competitors. They aren’t going to care for someone kicking over the castles in their sandbox.