OF PUBLIC CORPORATIONS
FROM BEING A BURDEN TO THEIR SHAREHOLDERS OR COUNTRY,
AND FOR MAKING THEM
BENEFICIAL TO THE PUBLIC 1
IT IS a melancholy object to those who walk through this great town or travel in the country, when they see the streets, the roads, and expensive restaurants, crowded with former Chief Executive Officers of public companies, followed by three, four, or six hangers-on, consisting of PR flacks, personal trainers and bodyguards, and second or third wives, all in furs and importuning passersby for the location of Charlie Rose’s studio. These ex-CEOs, instead of being able to work for their honest livelihood, are forced to employ all their time in playing the 100 Best Golf Courses in the World, yachting in the New Hebrides, and giving interviews on “Larry King Live.” Worse, they are routinely compelled by their straitened circumstances to author self-exculpatory autobiographies and tendentious management screeds (with the assistance of ghostwriters or third wives) and to promote same on nationwide speaking tours.
I think it is agreed by all parties that this prodigious number of former CEOs is in the present deplorable state of the nation a very great additional grievance; and, therefore, whoever could find out a fair, cheap, and easy method of making these individuals sound, useful members of the commonwealth, would deserve so well of the public as to have his statue set up for a preserver of the nation.
But my intention is very far from being confined to provide only for former CEOs; it is of much greater extent, and shall take in the whole number of current and former Chief Executive Officers of publicly traded corporations in this country and, by extension, the world.
The number of public company CEOs in this nation being usually reckoned five thousand, of these I calculate that there may be about fifteen hundred of consequence. The latest research by eminent scholars of executive pay indicates that these CEOs were paid an average of $4.9 million a-piece per annum in wages, benefits, and emoluments, thereby imposing upon the nation and upon the common shareholders of their employer companies an aggregate burden of $7.4 billion per annum. And yet this is not the worst of the imposition upon the population, since it is common for such CEOs to take with them substantial multiples of their current pay and benefits upon their retirement, voluntary or otherwise, from the post. A respected gentleman of my acquaintance, who himself is of the most unimpeachable character and honesty, even asserts that there have been some knaves and scoundrels among the ranks of former CEOs who have managed to depart their employers with amounts in excess of $200 million, although I can scarce credit such outlandish reports.
I shall now therefore humbly propose my own thoughts, which I hope will not be liable to the least objection.
I have been assured by a very knowing Frenchman of my acquaintance in New York, that a vigorous healthy CEO well compensated is at three years old a most delicious, nourishing, and wholesome food, whether stewed, roasted, baked, or boiled; and I make no doubt that it will equally serve in a fricassee or a ragout.
I do therefore humbly offer it to public consideration that of the fifteen hundred current CEOs already computed, those five hundred CEOs in their first year and those five hundred in their second year of service may be reserved for ongoing management, and five hundred CEO designates be identified for promotion to the post. The remaining five hundred currently in office may, upon the third anniversary of their employment as CEO, be offered in sale to the persons of quality and fortune though the nation; always advising the shareholders to let them suck plentifully at the corporate teat in the last fiscal quarter, so as to render them plump and fat for a good table. A CEO will make at least six dishes at a lavish entertainment for friends; and when the family dines alone, the fore or hind quarter will make a reasonable dish, and seasoned with a little pepper or salt will be very good boiled on the fourth day, especially in winter. I have reckoned upon a medium that a CEO newly appointed will weigh 190 pounds, and in three solar years, if tolerably remunerated with salary, options, restricted stock, and perquisites, increaseth to 260 pounds.
I grant this food will be somewhat dear, and therefore very proper for private equity partners, who, as they have already devoured most of the public corporations, seem to have the best title to the CEOs.
CEO’s flesh will be in season throughout the year, but more plentiful in February, and a little before and after; for we are told by a grave author, an eminent Equity Research Analyst, that public company shareholders are most willing to part with their CEOs during earnings season, when they are wont to preannounce bad news and disappoint earnings expectations.
Some persons of a desponding spirit are in great concern about that vast number of former CEOs, who clog our commwealth and push up the price of vacation homes on St. Kitts, and I have been desired to employ my thoughts what course may be taken to ease the nation of so grievous an encumbrance. But I am not in the least pain upon that matter, because it is very well known that they are every day dying and rotting by overeating and boredom, and tax audits and Senate probes, as fast as can be reasonably expected. Besides, any attempt to include these numerous former CEOs in the aforementioned sales to the rich would be certain to roil the market, and unnaturally depress the prices which public company shareholders could otherwise reasonably expect to earn from the sale of their own former executives.
I think the advantages by the proposal which I have made are obvious and many, as well as of the highest importance. For first, as I have already observed, it would greatly lessen the number of autobiographies, memoirs, and noxious how-to guides penned by former CEOs, with which we are yearly overrun. Secondly, public company shareholders will have something valuable of their own, which they may use to satisfy their personal obligations, their dividends being already seized, and capital gains a thing unknown. Thirdly, whereas the severance package of a public company CEO, from his third anniversary of service and upward, cannot be computed at less than $25 million a-piece, and twenty to thirty percent of all CEOs are now fired or retire every year, the nation's stock will be thereby increased by $7.5 to $11.3 billion per annum, besides the profit of a new dish introduced to the tables of all gentlemen of fortune in the nation who have any refinement in taste. And the money will circulate among ourselves, the goods being entirely of our own growth and manufacture.
Many other advantages might be enumerated. For instance, the addition of some hundreds of carcasses in our exportation of cattle, and the great reduction of sushi and other imported take-out foodstuffs, too frequent at our tables; which are in no way comparable in taste or magnificence to a well-nourished, fat, mature CEO, which roasted whole will make a considerable figure at a mayoral feast or any other public entertainment. But this and many others I omit, being studious of brevity.
Supposing that four hundred private equity families in this city, would be constant customers for CEO’s flesh, besides others who might have it at merry meetings, particularly at office holiday parties and closing dinners, I compute that New York City would take off annually about three hundred and fifty carcasses; and the rest of the country (where probably they will be sold somewhat cheaper) the remainder.
I can think of no one objection, that will possibly be raised against this proposal, unless it should be urged, that the number of second and third trophy wives will be thereby much lessened in the nation. This I freely own, and ’twas indeed one principal design in offering it to the world. For who among us can complain that we have not enough experience of Ivana, Pia, Wendy, Suzy, and their ilk? A very worthy person, a true lover of his country, and whose virtues I highly esteem, was lately pleased to suggest that an admixture of sauteed trophy wife might enliven roast haunch of CEO at table, and this author is not one to quibble with a culinary suggestion which seems so eminently reasonable.
I am not so violently bent upon my own opinion as to reject any competing suggestions proposed by wise men, which shall be found equally innocent, cheap, easy, and effectual. I profess, in the sincerity of my heart, that I have not the least personal interest in endeavoring to promote this necessary work, having no other motive than the public good of my country, by advancing our trade, providing for corporate executives, relieving the public company shareholder, and giving some pleasure to the private equity rich. I have no CEOs by which I can propose to get a single penny; my investments being in index funds, and my restricted stock unvested.
1 With apologies to Jonathan Swift.
© 2007 The Epicurean Dealmaker. All rights reserved.