Fun poem by Rene Sonsmann from the Smirking Chimp.
I love poetry. Always have. So here goes.
THE C.E.O.
The company’s share price had failed to perform
And anxious fund managers demanded reform.
The Board decided the M.D. should be the fall guy
So he left with an eight figure ‘golden goodbye’.
They then set about finding, amongst corporate aces,
The man to put smiles back on shareholders’ faces.
The new Chief Executive drove into town,
The black-tinted windows of his limo wound down,
He toured all the factories and the high office tower,
Before taking control at his new seat of power.
He was a Captain Of Industry, Lord Of All He Surveyed,
Worth every mill of the king’s ransom they paid.
Now, it’s interesting that employers expect me and you,
In return for our wage, to do the best we can do.
But for Senior Executives such rules don’t apply,
And for ten mill a year you can’t expect them to try.
So the Board, as an incentive, agreed to offer the man
A staggeringly generous stock option plan.
Please don’t get me wrong, I don’t blame the guy,
For securing an income so obscenely high.
But as this story unfolds, I hope that you’ll see,
How that stock option plan does affect you and me,
And why the way that executives get their remuneration,
Should be a cause of extreme consternation.
His brief from the Board was to stop the decline
In the share price, which had gone only south for some time.
His first act was, of course, ‘A wide ranging review
Of all operations’, so he’d know what to do.
And with the eyes of the market upon the new man,
A month or so later he announced his ‘Grand Plan’.
While the company’s business, he said, was basically sound,
There were problems but nothing he could not turn around.
There’d be pain, there’d be cutbacks and, it grieved him to say,
There’d be substantial job losses – starting today!
His ‘Vision for the Future’, his ‘Strategy for Success’,
Were wildly acclaimed by the Financial Press.
Now a company’s share price, in case it’s not clear,
Depends, largely, on the profit it makes year to year.
And profit, for those not in commerce instructed,
Is the sum left from sales once costs are deducted.
And from this, you can see, that lifting profit entails
One of two choices – cut costs or raise sales.
To raise sales isn’t easy, certain or quick,
So which, do you think, did our C.E.O. pick?
Yes! He cut thousands of jobs and threatened that more,
Without much lower wages, would be transferred offshore.
The market approved, the share pundits said “Buy”,
This man clearly meant business, he was their kind of guy.
He cut back on maintenance, the preventative sort,
He cut capital spending, no new machines would be bought,
He cut Research & Development, existing products would do,
He cut advertising, admin and sales support too.
He cut workers’ pensions (though not the management team’s)
And all but abandoned the Employees’ Health Scheme.
Well, after all this cost-cutting, profitability soared
The Press lionized him, he was adored by the Board.
Investors were convinced and shares started to buy,
And when, two years later, they hit a new high,
He was on the cover of ‘Newsweek’, Time’s ‘Man of the Year’,
He rang the stock exchange bell, got a back-slapping cheer.
But those cuts, which gave profits a temporary boost,
Gave rise also to chickens that must come home to roost.
Machines broke down more often and caused production delays,
Annoying loyal customers, who had heard anyways,
That competitors’ products were now better and cheaper,
Sales fell, slowly at first, but then progressively steeper.
‘Creative Accounting’ now came to the fore
As honest-to-god profits weren’t made any more.
There were dubious transactions, asset revaluations,
Sale and lease-back arrangements, financial manipulations.
For a couple more years he maintained the façade,
But concealing the truth became increasingly hard.
So the executive decided he’d not stick around
The company he’d managed right into the ground
From here on, he knew, things would only get worse,
So he sold the stock mentioned in an earlier verse,
And left with a profit of over one hundred mill,
Now, who do you think will get stuck with the bill?
It was a year or so later that the shit hit the fan,
So a new C.E.O. had to carry the can
For the worst corporate crash of the past two decades,
While the former chief executive escaped largely unscathed,
The media being loathe to condemn or accuse,
Lest their own blind support become front page news.
The factories are silent now, the jobs gone offshore,
The city’s a ‘ghost town’, where few work anymore.
The company collapsed, though their brand name’s still known
But, though they don’t advertise it, it’s now foreign-owned.
The small investors and workers, for whom life was once good,
Paid the price with their pensions and lost livelihoods.
And the former C.E.O., what of him, you might wonder?
How fares the main culprit of this corporate blunder?
Well, he winters in Aspen and summers in Maine,
He bought a place in The Hamptons, flies his own Lear jet plane.
He’s much in demand and firms pay richly to hear,
Words of wisdom from the former ‘Time’s Man-of-the-Year”
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