Another Greedy Bastard

[retire@40]

Here's another guy that could have retired early and enjoyed the remaining decades of his life, but he just wasn't smart enough.  Some people will never figure out when enough is enough.

http://news.yahoo.com/news?tmpl=story&cid=509&e=3&u=/ap/20050713/ap_on_bi_ge/worldcom_ebbers

NEW YORK - Bernard Ebbers, who as the once-swaggering CEO of WorldCom oversaw the largest corporate fraud in U.S. history, wept in court Wednesday when a judge sentenced him to 25 years in prison — the toughest sentence yet in the string of recent corporate scandals.

...On Monday, another judge gave her blessing to a settlement under which Ebbers must forfeit almost all his personal assets, including $5 million cash up front, to resolve a shareholder lawsuit. That settlement will leave Ebbers' wife with about $50,000 of Ebbers' assets and a modest home in Jackson, Miss.

 

[LovesLife]

I'd like to see what their definition is of a "modest home".

LL

 

[polloloco]

50 K will not last her even three months.

 

[sgeeeee]

Here's a link to an article I posted on intrcst's board a few days ago that talks about this kind of executive.


http://www.dailyreckoning.com/RudeAwake/Articles/RA070805.html

"PINSTRIPED PSYCHOPATHS
By Eric J. Fry

Some psychopaths occupy a prison cell. Others occupy a corner office. Both are dangerous.

Psychopaths possess a profound lack of empathy. They use other people callously and remorselessly for their own ends. Psychopathic CEOs are no different. By advancing their own interests, with little regard for the agony they
might inflict on others, they jeopardize the welfare of employees and investors alike.

In short, psychopathy is bad business.

. . .


"According to the Canadian Press and Toronto Sun reporters who rescued the moment from obscurity, Hare began by talking about Mafia hit men and sex offenders, whose photos were projected on a large screen behind him. But then those images were replaced by pictures of top executives from
WorldCom, which had just declared bankruptcy, and Enron, which imploded only months earlier."

"These are callous, cold-blooded individuals," Hare scowled. "They don't care that you have thoughts and feelings. They have no sense of guilt or remorse...I always said that if I wasn't studying psychopaths in prison, I'd do it at the stock exchange."

. . .

In 2004 the CEOs of 179 major companies were paid an average of $9.84 million, up 12 percent from 2003,
according to a survey by Pearl Meyer & Partners. By contrast, average labor compensation rose only 4.5 percent. (Unless a guy can hit a baseball 400 feet, or create misogynistic rap lyrics, he doesn't deserve that kind of money!)

. . .

But even from a rabidly capitalistic perspective, investing in psychopathic management can be very bad business. Folks like Enron's Andrew Fastow, Sunbeam's "Chainsaw" Al Dunlap and Worldcom's Bernie Ebbers have demonstrated the destructive capacity of corporate psychopathy.

. . .

Given the power that CEOs wield, Prof. Hare suggests that we screen them for psychopathic behavior. "Why wouldn't we want to screen them?" he asks. "We screen police officers, teachers. Why not people who are going to handle billions of dollars?"

. . .

Psychopathy is destructive, no matter whether it roams the back streets or roams on Wall Street. "

 

[wabmester]

Let this be a lesson to all of you: mischaracterize your capital expenditures and other business expenses, go to jail! (Hmm, not quite as catchy as "use a gun, go to jail" is it?)

 

[Nords]

Given the power that CEOs wield, Prof. Hare suggests that we screen them for psychopathic behavior. "Why wouldn't we want to screen them?" he asks. "We screen police officers, teachers. Why not people who are going to handle billions of dollars?"

Psychopathy is destructive, no matter whether it roams the back streets or roams on Wall Street. "

I've made good money from screening for psychopath CEOs... and then shorting their stocks.

 

[Helen]

SG,

Thanks for the fascinating article, I've long been interested in the topic of psychopaths.

I often wondered what type of an enviroment Enron was to work in. I suspect that there were many psychopaths at the helm.

I found the paragraph about that bastard Al Dunlap, enlightening:

"'Chainsaw' Al Dunlap [would] score impressively,"
Deutschman relates. "What do you say about a guy who didn't
attend his own parents' funerals? He allegedly threatened
his first wife with guns and knives. She charged that he
left her with no food and no access to their money while he
was away for days. His divorce was granted on grounds of
'extreme cruelty.' That's the characteristic that endeared
him to Wall Street, which applauded when he fired 11,000
workers at Scott Paper, then another 6,000 (half the labor
force) at Sunbeam...His plant closings kept up his
reputation for ruthlessness but made no sense economically,
and Sunbeam's financial gains were really the result of
Dunlap's alleged book cooking."

Al hurt a lot of people who had worked hard all their lives.

The author, Ann Rule, said many years ago that not all psychopaths are killers. Many are successful businessmen. I guess it depends upon how one defines successful.

-helen

 

[farmerEd]

>>That settlement will leave Ebbers' wife with about $50,000 of Ebbers' assets and a modest home in Jackson, Miss.

Thats gotta hurt...

 

[bow-tie]

...I often wondered what type of an enviroment Enron was to work in.  I suspect that there were many psychopaths at the helm. -helen

A friend works for Random House and sent me Conspiracy of Fools.  Its 600+ pages about Enron and its growth --> implosion.  I'm only half through it, but its a very interesting read.  Some of those folks' incompetence, and there were numerous, was matched and exceeded by their greed.

I keep finding myself grinning and shaking my head while reading - "How the hell did they manage to pull this off for so long?"  Seems to me it was a grand conspiracy, indeed, and was accomplished through the greed of all parties involved, from the company, to the auditors/consultants, to the investment bankers.  Everyone was looking to make a killing.

I see a lot of that 'good ole-boy' business at work.  Makes me want to vomit. Your ability to do the job is secondary to your connections and ability to be a 'yes' man. WTF?

 

[Jay_Gatsby]

A friend works for Random House and sent me Conspiracy of Fools.  Its 600+ pages about Enron and its growth --> implosion.  I'm only half through it, but its a very interesting read.  Some of those folks' incompetence, and there were numerous, was matched and exceeded by their greed.

I keep finding myself grinning and shaking my head while reading - "How the hell did they manage to pull this off for so long?"  Seems to me it was a grand conspiracy, indeed, and was accomplished through the greed of all parties involved, from the company, to the auditors/consultants, to the investment bankers.  Everyone was looking to make a killing.

I see a lot of that 'good ole-boy' business at work.  Makes me want to vomit.  Your ability to do the job is secondary to your connections and ability to be a 'yes' man.  WTF?

That's how it always is unless you own/head the company. Then again, if you own/head the company, you're more likely to be greedy than ethical (e.g. Bernie Ebbers). Yet even if you're not greedy, you most certainly won't want to surround yourself with negative people (i.e. those that tell you the truth about how things are), since doing so might bruise your ego (in regards to your business/leadership acumen).

 

[bow-tie]

Me and my stupid idealism. Gets me every time...

 

[laurence]

Where's JG to say something in Ebbers defense?

 

[Arin38]

Me and my stupid idealism.  Gets me every time...

There are plenty of good companies in this country run by very ethical and smart CEOs - both public and private. We tend to only hear about the bad ones.....

 

[unclemick]

My eyes glaze over - when reading Bogle's overly long examination of the shift from 'owner's capitalism' to 'manager's Capitalism' that has taken place over time. Along with the screw job handed out to those of us with mutual funds.

His beating the drum continuosly may eventually produce some results - But - remember the blazing speed of his 1976 index fund.