I'm as Heartless as the Next Guy

6 o’clock evening news.  Closing business wrap-up; voice of reporter/script reader

Turning now to the business news, an innovative movement is drawing serious interest from corporate governing boards and investors, as more than a dozen of the nation’s Fortune 500 firms have moved to dismiss their CEOs in the past six months.  

In each case, the CEO has been replaced by a vast number of workers hired at the average wage in the company--many of them experienced, highly motivated, and well educated people who have been out of work for as long as two years, vainly searching for employment.  The phenomenon has been dubbed "The Robin Hood Revolution" and "Dump the Chump."

One corporate board member, who asked not to be identified, summed up the results of the movement as "Amazing!”  

Insert: Interview clip from anonymous board member

“We were able to hire an additional 1,795 workers for what we were overpaying one person, our CEO--who wasn’t doing that great a job in the first place.  Almost two thousand additional employees, and it didn’t raise our personnel costs one thin dime!  Those 1,795 are outperforming him on several orders of magnitude.  It’s been a real shot in the arm for the company.  Our costs have stayed level, production is way up, and morale has skyrocketed.  I don’t know why we didn’t think of this before!”

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The movement is unexpected bad news for CEOs, who have been riding high during the current Great Recession.  At least ten CEOs reportedly took in more than $50 million apiece during 2012, at the same time they were closing plants, slashing workforces, raiding employee pension funds, and dramatically lowering wages for new entry-level employees.  Ford CEO Alan Mulally, whose pay is 2,500 times that of a new Ford plant worker, cashed in on $61 million, and Apple’s Tim Cook $139.7 million.  Both have been described as "nervous" about the recent development.  

Salary is only the tip of the iceberg with modern CEOs, who also commonly receive corporate stock, incentive payments, executive life insurance, financial and tax counseling service, and generous supplemental retirement plans.  One unanticipated problem has arisen with the departure of deposed executives--what to do with their other perks.

Insert: Interview clip from second anonymous board member 

“When we canned our CEO, we were left with the corporate jet and pilot; the company limousine and chauffeur at his disposal; the bodyguards and electronic technicians who provided his personal security; and the luxury apartment maintained for times when he was forced to remain in the city overnight.  We debated whether to make these available on a rotating basis to the 1,795 people who replaced him, but eventually decided the logistics were too cumbersome.  So we sold them off and used the income to supplement the inadequate pensions of the new hires.”

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In areas impacted by these corporate realignments, the strategy has had the unintended consequences of increasing consumer confidence, reducing unemployment,  boosting retail sales, raising tax revenues, cutting mortgage foreclosures, and slashing crime and homelessness.  

“Not that we cared about any of that," said one corporate insider.  "I’m as heartless as the next guy, but you can’t buy PR like this."  He paused.  "Well, you can," he amended, "but nobody would believe it.”

© Tony Russell, 2013