America's caste system - a reflection on executive compensation

When I drive back to Washington, from my home in the country, I pass the barricaded parking areas and shuttered buildings of what were once State of Virginia rest stops for travelers on Route 66. Both of these facilities were closed to help meet deficits in the State budget. For some reason, passing by these facilities, which made ordinary traveler’s lives more pleasant in small ways always brings the topic of executive compensation to mind.

For me a poster child of obscene levels of executive compensation is former General Motors Chief Executive Rick Wagoner. This evening, I researched how Mr. Wagoner is doing on the internet. A Fox news posting (Fox News is not unsympathetic to the business community and free enterprise) noted Mr. Wagoner’s accomplishments in an article headlined “Former GM CEO Rick Wagoner Gets $10M Retirement Package." It noted that when Wagoner became CEO, GM shares were valued at $92. Recently, with GM in Bankruptcy, trading in GM shares was suspended with the value at $1.15 per share. According to Fox, GM has issued statements that its stock has, essentially no value. It noted that during the past four years, ‘GM racked up $40 billion in losses.’

Fox News sympathized with Mr. Wagoner’s plight. It noted that during his 32 years with the company he earned only $62.3 million $38.7 million for his services as Chief Executive, leading GM into bankruptcy. It noted that in contrast to the $400 million received by the Chairman of Exxon Mobil, the $161.5 million earned by the Chairman of Merill Lynch, culminating a disastrous tenure, and the $140 million awarded to Michael Ovitz after a brief tour as Disney President, Wagonner’s compensation was modest indeed and, according to an ‘executive compensation specialist,’ not at all out of line. The fact that this occurred when GM slashed previously guaranteed benefits for most of its retirees was not viewed as a problem.

For those, such as myself, who have spent many years researching in South Asia, especially India and Sri Lanka, the explanation is simple. Compensation in ‘free market’ America as become part of a caste system. Corporate Executives such as Wagoner, Stan O’Neil of Merill Lynch, Disney’s Ovitz and many others simply view themselves as a different species of human beings, governed by different rules and guided by different moral precepts and entitlements. The are the Brahmins, those they employ are low caste or untouchable. Their 'needs' are described using an entirely different discourse.

Except when I drive past shuttered rest stops on route 66 I think little about this immoral system and the ill-gotten financial gains it has produced for a privileged upper caste few. But I do wonder how they are spending the munificence that deprived-stockholders, employees or, in some cases, the US taxpayers have unwillingly (or unwittingly) bestowed on them. Are they spending it on expensive vacations and $10,000 watches, first class travel, and $100 plus bottles of wine for dinner. Or have they, perhaps, established scholarship funds for the children of fired employees or contributed to the creation of social businesses such as Nobel Laureate Mohammed Yunis described his recent book, A World Without Poverty.

If they are looking for a worthy target for some surplus cash, perhaps they could consider creating a special fund to open the closed rest stops on Route 66, for the benefit of the less privileged lower caste Americans - teachers, truck drivers, commuters and ordinary tourists - who miss them.

Durable and reliable guidance for these troubled economic times

Each passing day seems to bring further news of stock market losses, job cuts, mortgages foreclosed and bankruptcies of corporate icons contemplated. Last week we witnessed the spectacle of the “big three” auto presidents - Ford, General Motors and Chrysler - traveling to Washington in their private jets to plead for government handouts. All of us are seeking guidance at a time when many whose “wisdom” and “integrity” we trusted have failed us.

This morning’s Gospel message at Leeds Church provided guidance from a more reliable and durable source. The quotation is from the book of Matthew in the New Testament of the Christian Bible, Chapter 25, verses 31-46.

"But when the Son of Man comes in his glory, and all his holy angels with him, then he shall sit on the throne of his glory. "And there will gather before him all the nations, and he will choose them one by one, like the shepherd separates the sheep from the goats. "And he sets the sheep from his right and the goats from his left.

"That is when the King says to those from his right, 'Come, blessed of my Father, inherit the Kingdom that was destined for you from the foundations of the universe." For I was hungry and you gave me to eat. I was thirsty and you gave me to drink. I was an outcast and you took me in. 'I was naked and you clothed me. I was ill and you visited me. I was in prison and you came to me. '

"Then the saintly will say to him, 'Our Lord, when did we see you hungry and we fed you, or you were thirsty and we gave you drink? 'And when did we see you an outcast and we took you in, or when were you naked and we clothed you? 'And when did we see you ill or in prison and we came to you?' And the King replied and told them, 'Amen, I am telling you, that whatever you do for one of these my little brethren, for me you have done

"Then he will say also to those on his left, 'Go away from me you accursed to eternal fire, that is set for the Devil and his angels. 'For I was hungry and you did not give me to eat. I was thirsty and you did not give me to drink. 'I was an outcast and you did not take me in. And I was naked and you did not cloth me. And I was ill and in prison and you did not visit me.'

"Then they too shall reply and say, 'Our Lord, when did we see you hungry or thirsty or an outcast or naked or ill or in prison, and we did not serve you?' Then he will reply and say to them, 'Amen, I am telling you, that whatever you did not do for one of these little ones, neither did you do it for me.' And they will go these to eternal* torment and the saintly to eternal life."

Another year of service for a 22 year 'old friend'

My red Honda Civic hatchback is 22 years old.  There is a rule of thumb for comparing a dog’s age and that of a human being.  One human year = 7 dog years, according to Metpet.com. If there is a comparable rule of thumb for cars, mine must be older than I am. 

At least in the US, the passing of a pet is often a child’s first experience with death.  In other parts of the world, of course, things are different.  A child’s first death experience is often the loss of a brother, sister, friend, neighbor or parent.  In Sri Lanka, five of my friends have been killed either  by assassins or the police.  

Anyhow my Honda just  passed safety inspection for another year.  A bright orange sticker on the windshield  certifies that it can be driven safely, at least until August 31, 2009. This is a remarkable testimonial to the quality of workmanship for which Honda Motors is known. Disciplined maintenance and good luck have helped too, I suppose. 

Top executives of General Motors, Ford and Chrysler whine about the competitive disadvantage they face when up against Honda and Toyota.  My own views, based on sad experiences with GM vehicles over the years (including a very recent truck purchase), is that if American manufacturers built better quality cars and trucks, more people would buy them.

I am thinking about a new vehicle, though what I have heard about the sleaziness of the car-selling business is a bit daunting.  The Honda Element is my first choice - it would enable me to carry my bicycle without mounting a rack.  I keep hoping Honda will bring out a hybrid version.

Occasionally, I seek advice from friends about new car options.  But when I do so in the presence of my Honda Civic, it seems disloyal.  I speak very softly, even apologetically.