In our competitive capitalist economy, one which is still struggling out of a recession and where pay and benefits are being cut in both the public and private sectors, there is still a financially secure vocation out there: failed corporate executive.
It was bad enough when already-overpaid Wall Street executives insisted they were entitled to huge bonuses, despite taking huge risks with other people’s money and successfully demanding financial help from taxpayers. Now, the executives who ran Borders bookstore (or ran it into the ground, depending on one’s perspective) have been given permission by a bankruptcy court to collect some $6.6 million in bonuses as the company tries to reorganize under bankruptcy protection. The amount is tied to certain conditions, including emerging successfully from Chapter 11, or alternately, finding a buyer. The company had initially asked for $8 million in bonuses, prompting objections from both the federal government and unsecured creditors.
It’s fair to ask why the executives of a failing company believe they deserve to be financially rewarded for their work, and the answer is laughable: The company said it needs to retain the senior executives, keeping them from jumping to another company. Is there really such a huge demand, in an economy where unemployment is inching down at a painfully slow rate, for corporate executives who presided over a failing company? Is it possible that the executives’ business decisions might have been part of the problem? [Read more about unemployment and the economy.]
True, the bookstore industry is sketchy right now; people buy online, or read online. But some bookstores may have screwed up their best selling point—a reader-friendly environment where books are prized and promoted—by turning their stores into knick-knack and fancy chocolate shops with a few tomes thrown in for décor. The losers now are the bookstore clerks and book buyers. It’s against all the rules of basic capitalism and entrepreneurism to protect corporate executives financially regardless of their individual or collective performance. There have been lots of books written about market economics. Maybe the executives could read them.