Many corporate executives openly and arrogantly steal from the public companies they work for. Since the company belongs to the stockholders, they steal from the stockholders. They betray the stockholders’ trust. Take a look at this chief executive compensation data, please.
Paying themselves such wildly unearned bonuses constitutes simple embezzlement. Of course, the board of directors must approve these bonuses, most of which have increased during this spiraling downturn (let us call it what it is, this depression.) But the directors are part of this conspiracy.
An engaging question: Is such conduct criminal?
Let me make the argument with a simple analogy: John Manager runs a local grocery story for its owners, the many heirs of Henry Owner, deceased. All of the money earned from the business belongs to the estate, and none, of course, belongs to John or the trustees.
A fair and reasonable wage for John, according to his skill and experience is $100. But John has a special relationship with the trustees. First, they were selected by John. Next, they have a tacit understanding: John gets $1000 for his work instead of $100. But the trustees John selected get benefits that include tickets to the Superbowl, recommendations to join John’s clubs, his political support when one of the trustees wants to get on the city council, trips with John to Hawaii during the deadly winter, and John buys groceries from the trustees who are his wholesalers. John is also on the board of the wholesalers who happen to overpay themselves. The heirs are so many and so scattered that they take what they get and are happy to get any benefit at all.
John has, in fact, stolen $900 from the heirs since the reasonable value of his service is $100 while he has paid himself, with the trustees’ consent, $1000. Nifty little scheme. Remember, the monies have been paid by the trustees with the full knowledge of the above facts. The conspiracy is to aid John in stealing $900 from the estate. A dedicated prosecutor could make a criminal case stand up against both John and the trustees.
But no one will prosecute because John and the trustees and the prosecutor and the prosecutor’s political bosses and all of their mutual friends are members of the same country club, all give to the local symphony and all go to the same church and pray together every Sunday and, of course, buy a gross of Girl Scout Cookies.
If Billy Joe, half doped up and in need of another fix, comes stumbling into the store and, at gun point, robs it of $20 he will be immediately prosecuted and sent to the pen for twenty years. He is a danger to society, is he not?
I rest my case.
If a corporate executive will steal from the corporation it runs will it not also steal from the American public that constitutes its customers and clients? And can we really trust its products or services?