With CEOs like this who needs sanctions?


I SHUDDER to think of the laughter that is going on in corridors in the capital following revelations of the obscene salaries certain comrades have been earning while the rest of Zimbabwe is groaning under the burden of an economic crisis.
This latest round of escapades from comrades deals a heavy blow for those of us here in the Diaspora who have self appointed ourselves defenders of the revolution.
If Zimbabwe was Cuba I am sure certain comrades would have been sent off to the firing squads by now because their actions are tantamount to treason.
Corporate greed sparked the famous Occupy Wall Street a few years ago here in America.
Can one say Zimbabwe might be heading that way?
At a time when most Americans were struggling to make ends meet, the CEOs of many business corporations, investment firms and banks were pulling eight figure salaries from Government bailouts.
The same people who had been entrusted with the duty of kick-starting the economy were buying private jets with gold plated toilets.
In 1991, Graef Crystal, a prominent executive pay consultant, published a bestselling book, In Search of Excess: The Overcompensation of American Executives, in which he calculated that over the course of the 1970s and 80s the real after tax earnings of the average manufacturing worker declined by about 13 percent. During the same period, that of the average CEO of a major American corporation had quadrupled. Bill Clinton took up the issue in his 1992 presidential campaign and immediately upon assuming office he had Congress pass a law that forbade companies recording executive salaries plus bonuses in excess of US$1 million as tax-deductible expenses.
Under the Obama administration, virtually nothing has been done to constrain top executive pay.
President Obama signalled his unwillingness to take on the issue when, in an interview in February 2010, he was asked about the many millions paid in 2009 to Jamie Dimon, CEO of JP Morgan and Lloyd Blankfein, CEO of Goldman Sachs, in wake of the financial meltdown and bank bailouts.
“I know both those guys, they are savvy businessmen, I, like most of the American people, don’t begrudge people success or wealth,” said Obama.
“That is part of the free-market system.”
It is mind boggling that taking government bailout monies and converting them to salaries instead of using them to stimulate the economy could be considered a success or means of creating wealth.
But corporate executives would not be getting away with it so to speak if politicians were doing their job.
For so long academics have bemoaned the influence of campaign funding on our politicians.
Each campaign year, corporates contribute billions to both the Republicans and Democrats as a way to ensure that they influence policy.
The result of this is that America is in debt to China of all countries, the boogieman used by capitalists to scare their children to bed.
Greed and corruption go hand in hand.
It can be said one major root of greed stems from how government officials and corporations have accumulated their wealth and success at the expense of the common American citizen.
Many of our legislators stand as examples of how greed is destroying the country.
Their greed trickles down into our society and is reflected in the bills they approve in Congress – bills that often benefit corporations and their lobbyists.
I am not saying top executives should not be well paid, running a major enterprise is a demanding job, you would expect to pay a high salary to get and retain talented hard working people.
Unfortunately unlike workers, who get told their salaries are not going to get raised or are being cut due to ‘hard times’, corporate executives can count on their big pay cheques in good times and in bad times. Interestingly, these same executives tend to do extremely well when their companies are doing poorly.
This phenomenon of high earning executives come rain or sunshine is predominantly in America.
The CEOs of large successful companies elsewhere like Samsung, Toyota, and Siemens get by on a fraction of the pay of their less successful counterparts in America.
Corporations in Europe and Asia typically have a very different governing structure.
They often have large institutional shareholders who actively police the conduct of their top executives, including their compensation.
In America by contrast and what has probably sneaked into Zimbabwe, corporate boards who are supposed to represent shareholders are more often than not allied with top management.
The board members themselves get fat pay cheques in the hundreds of thousands of dollars for attending four to six meetings a year.
In a scenario like that, they have no reason whatsoever to scrutinise the performance and earnings of top executives.
Coming back to Zimbabwe, it is shocking to hear that some executives in parastatals are earning obscene salaries.
I believe President Obama might be tempted to quit the presidency and come and run a state enterprise because he is making far less a year as the American President than some of our comrades are making in two months.
For the record, US Code 102 that deals with compensation of the President states that ‘the President shall receive in full for his services during the term for which he shall have been elected compensation in the aggregate amount of US$400 000 a year, to be paid monthly’.
So dear reader you do the maths, for all the stressful nights Obama goes through, the political hobnobbing, the endless crises and wars, and at the end of the year his compensation is at par with the man who runs an outdated broadcasting services which is struggling to pay its workers, or the man who runs an medical aid whose subscribers fail to get adequate medical attention and drugs in Zimbabwe.
As Zimbabweans we need to get our act together and stop this rot. Future generations will not judge us by our words, but by our actions. The revolution that has swept the world and made Zimbabweans famous certainly risks being marred by failure of systems where those entrusted with the country’s well-being abuse that trust and pursue selfish personal interests.


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