Executive Privilege: Malden Mills chairman Aaron Feuerstein has been hailed by many as the conscience of corporate America, the boss who stood by his workers after a devastating 1995 fire ravaged his factory. His moral standing has been instrumental in securing support in the fight to save his bankrupt company from creditors — and with Malden Mills expected to emerge this week from Chapter 11, his Orthodox Judaism-inspired approach to business seems to have been vindicated.
Feuerstein’s piousness stands in marked contrast to the ethics of his colleagues at the top of the corporate ladder. “For many,” The Economist bluntly editorializes in its October 11 issue, “top bosses are not the toughest or most talented people in business, just the greediest.”
Despite the widespread public condemnation engendered by corporate scandals in recent years, the excesses of senior executives are only getting worse, according to the venerable British magazine. The average CEO now takes home 400 times the pay of the average production worker, a ratio that has increased 10-fold since 1980. And the buck doesn’t stop there. Departing chief executives in the United States — including those whose companies performed below expectation — are on average rewarded with a $16.5 million severance package.
“Not only does it seem that bosses are being fed ever bigger carrots, but also that if the stick is finally applied to their backside, they walk away with yet another sackful of carrots to cushion the blow,” the editorialist writes. “Bugs Bunny couldn’t ask for more.”
Rather than waiting for an Aaron Feuerstein, The Economist argues, shareholders need to put their mouths where their money is. As the ostensible owners of a company, shareholders should use the power of their purses to demand a say in picking chief executives — and how much they earn.
“Capitalism’s pillars, the shareholders who own the company, will have to become more actively involved in choosing the directors who represent them and in policing what they do,” The Economist advises. “Shareholders, after all, supply the carrots.”
* * *
Wal-Mart Economics: In his unrelenting effort to buy back Malden Mills, Feuerstein may have saved the jobs of his 1,200 employees for the second time. The creditors knocking on his factory door could be expected to export the company’s manufacturing operations overseas, where labor can be found on the cheap, courtesy of free-trade policies.
That’s just American business as usual, laments Rep. Bernie Sanders in an October 14 opinion article in The Hill:
“Our economy has been decimated by ‘free’ trade, and someone has to point out that, like the proverbial naked emperor, our policies have no clothes — or more appropriately in this context, no jobs making clothes, or electronics, or a host of other products we use every day.”
During the last three years, notes the Vermont independent and lone socialist in Congress, 2.7 million manufacturing jobs have been lost, reducing the number of factory jobs to 1958 levels. Furthermore, he charges, wages are plummeting across the board as the supply of workers outweighs demand.
“The demise of well-paid manufacturing jobs is best illustrated by the following,” Sanders argues: “20 years ago, the largest private employer in the United States was General Motors, where workers earned — and still earn — a good income. Today, our largest employer is Wal-Mart, where workers earn below-poverty wages.”
While the average American worker brings home less money, if not a pink slip, the benefits of doing business abroad are reaped by multinational corporations — headed by the same CEOs slammed for greed by The Economist and by Sanders himself in an opinion article in the Forward last year.
“Corporate America and its supporters in the White House and Congress,” he writes, are destroying “the American middle class by making jobs America’s No. 1 export. If we continue to force American workers to ‘compete’ against desperate people throughout the world, American workers will continue to lose.”
* * *
Earnest Anti-Zionism: Heeb magazine has been riding its saucy style to stardom in the small world of Jewish publications.
But after a New York Times article on October 13 about changes underway at the upstart magazine, Heeb’s volunteer staff has gone to great lengths to point out that they are not that irreverent.
After discussing the magazine’s ambitious plan to define a new lifestyle for young Jews, the article in the Times’s business section referred to Heeb’s “formula of earnest anti-Zionism.”
This description made no one happy.
Jennifer Bleyer, the founder of Heeb, called the description “sloppy reporting” by the Times’s reporter Bill Werde.
“We are not anti-Zionist. We have never described ourselves as such,” Bleyer told the Forward. “We’ve had an incredibly nuanced and thoughtful and complicated take on the situation in the Middle East. But we’re not in any way anti-Israel or anti-Zionist.”
In a testament to the power of the Gray Lady, the one-line, throwaway reference in a small article buried on the inside pages of the business section still managed to provoke a string of phone calls to the UJA-Federation of New York, which was listed in the Times article as a sponsor of Heeb.
“They just didn’t understand why we would be funding an anti-Zionist publication,” UJA-Federation’s executive director of marketing, Marcia Neeley, told the Forward.
But the phone calls did give the federation a chance to explain that it had recently stopped funding Heeb — a decision that, in turn, was the subject of an article in the October 14 issue of the The New York Sun.
“There were hints that politics played a role” in the federation’s decision, reports the Sun’s Eric Wolff — an assertion disputed by both the federation and Heeb.
“That is not true,” Neeley said. “Politics did not play a role.”
“The funding was never cut,” Bleyer explained. “We were given a one-year grant, and it was not renewed.”
Nor, we would assume, will be Heeb’s office subscription to the Times.