As the right wing tries to convince Americans that health care reform is unaffordable, hospitals, claiming they have to stay “competitive,” are spooning out multi-million dollar pay packages to their top executives.
Recent reports printed in Connecticut newspapers reveal that three top managers at Danbury Hospital took in, over the last year, a combined haul of $7.7 million.
Leslie Gianelli, spokesperson for the Connecticut Hospital Association, is doing her best to defend the pay heists against a backdrop of 50 million Americans going with no health insurance at all.
She told the press that hospital executives are a “unique bunch” who “work in an environment of life and death decisions every day. There are a lot of people who could not hold up under these situations.”
Despite Gianelli’s remarks, a hospital, one might think, is a place where a lot of people find themselves in an environment of life and death decisions on a daily basis. A hospital, it would seem, is a place where a lot of people do hold up under these situations.
Nurses, to name only one group, come to mind.
“High pay for hospital executives,” says Connecticut nurses’ union spokeswoman Deborah Chernoff, “signals that we don’t want to invest in what’s important in health care.”
“Competitive pay” for hospital execs, of course, is seen by the execs as much more important than “competitive pay” for hospital workers or funding to meet the health care needs of the people. But as loud as they are in demanding “competitive pay,” the hospital CEO’s are mere novices when compared to executives who inhabit the halls on Wall Street.
The Danbury Hospital execs can only dream about the achievements of their comrades at Morgan Stanley, for example, who have fixed it so that even steering the company off the cliff lands you in a pile of bonus dollars.
The Morgan Stanley execs have managed, for themselves, to eliminate some of the harshest rules of capitalism, particularly the rules that say hard work and productivity produce rewards.
Morgan Stanley reported a $1.26 billion second quarter loss this year but managed, nevertheless, to set aside more than three times that amount – $3.9 billion – for bonuses and other pay rewards for its top executives. It’s heads we win, tails we win! If we make a profit, we get a bonus and if we lose money we get $800 million more in bonuses than last year, when we made money! Isn’t capitalism great? Who needs socialism?
It seems like it was only very recently that everyone was up in arms about outrageous pay packages for company execs. It hasn’t taken long after the recent crash for them to get back in the business, however, of fattening “competitive” pay checks.
Beyond America’s shores the huge bonuses have been noticed by and have been made an issue by a variety of world leaders.
The French minister for the economy, industry and employment, hardly a partisan of working-class militancy, said about the bonuses: “The old ways are returning. They increase inequalities. They are dangerous for the economy as a whole. They arouse incomprehension and anger. They must cease.” Christine Lagarde made that assessment when she discussed with a reporter from Le Monde, July 22, the billions in bonuses that are being handed out at Goldman Sachs and other Wall Street firms.
There are signs that some of the first, perhaps more serious moves against scandalous executive pay packages are now being made in Europe.
While it is too early to tell whether they will have the desired effect of curbing this form of corporate abuse, there are indications that in, at least one case, an individual ended up with having almost all of his fun spoiled.
Wendelin Wiedeking is a man who really enjoyed being a CEO. Until about five weeks ago.
The lush German car company, Porsche, hired him in 1993 under a contract that earned him $1.4 million a year in base pay and one percent of the company’s annual profits. In 2008 he earned more than $113 million under that formula.
He had apparently realized the age-old dream of finding a job one really loves. He told a German magazine, “I’m the chief executive and I’m feeling as happy as a cat in that role.”
He might have become less happy than a cat last month when Porsche dumped him to help close a $14 billion dollar debt it was facing. He shouldn’t be too unhappy, however, because he was eased out the door with $71.1 million in severance pay.
Definitely not happy at all, however, is German Finance Minister Peer Steinbruch who is calling for a cap of $820,000 a year on the salaries of German corporate executives.
Back in the United States, unfortunately, when it comes to getting away with the store, company executives still have it much better than their European brothers and sisters.
Under the tax laws rigged by the Bush administration corporations value the stock options they hand out to their executives at X amount of dollars but at an amount much higher than X on their tax returns. This gives them the best of both worlds – they can claim higher profits but pay lower taxes. Heads they win, tails they win! Isn’t capitalism great? Who needs socialism?
Sen. Carl Levin, D-Mich., made a speech on the floor of the Senate recently in which he declared that this accounting double standard “encourages corporations to hand out massive stock option grants to their executives. Levin wants this incentive for corporate excess brought to an end and has introduced legislation that would require corporations to set the value of stock options the same way on both financial statements and tax returns.
If the bill became law corporations would end up paying $20 billion a year in taxes that they now avoid paying. That, one suspects, would spoil a lot more of the fun some of the people on Wall Street are having.
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