We’re told by the Powers That Be that CEO’s of major corporations are the best of the best in America’s economy – studly geniuses who are worth every measly million of their princely paychecks. It’s said that since they’re the ones who make the corporate system work, the compensation marketplace naturally rewards them with the riches they deserve.
Let’s meet one of these studs. Aptly named Charles O. Prince III, he has been CEO of Citigroup for the past four years, during which he has enjoyed take-home pay of more than $53 million.
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But wait – those have not exactly been glorious years for this Wall Street megabank. In fact, on Prince’s watch, Citigroup has seen $64 billion of its market value evaporate. Also, because he revved up the bank’s involvement in the now-collapsing subprime mortgage market, billions of dollars in losses continue to mount at Citigroup. So, Charlie Stud III has now been bounced by the board of directors.
Well, say the Powers That Be, this just shows that the system works – Prince didn’t perform, so he took a fall, just like any other employee would.
Uh… not exactly. Your rank and file workers who mess up don’t get a $12.5 million cash bonus, as Prince is pocketing. Right – that’s a bonus for failure. Nor would they walk away with a $1.7 million pension. Oh, did I mention that Citygroup is also bestowing an office, a limo, and a chauffer on the guy who cost them billions? In all, the CEO compensation gods are rewarding Prince with a separation package worth about $105 million.
Despite what the Powers That Be want us to believe, there is no “natural force” guiding America’s skewed system of paychecks. As the scandalous case of Charles O. Prince III vividly demonstrates, the whole thing is rigged by those running the system.
“For ousted Citygroup Chief, A Bonus of $12.5 Million,” The New York Times, November 12, 2007
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