[bct] Re: changing business world

  • From: Tim Cross <tcross@xxxxxxxxxxxxxxx>
  • To: blindcooltech@xxxxxxxxxxxxx
  • Date: Sun, 26 Feb 2006 11:52:07 +1100

Yes, its seems everything is becoming geared for short term profits
with little concern for the long term outcomes. Its frustrating when
you see industries in which the bulk of those working in it are on low
wages and a very few are on outrageously high wages. We had a case not
long ago when a guy in his mid 30's who had been president of a small
bank got a payout of over $60 million dollars at the end of his 7 year
contract. I don't care how good someone is as a director or president
of a company, nobody deserves a $60 million bonus just for completing
a 7 year contract! Its made worse by the fact this is in an era when
banks are cutting back on services and branches and paying next to
nothing for interest on savings - something they claim must be done to
maintain their multi-billion dollar profits. Meanwhile, tellers are
paid poorly and are getting retrenched as ATMs take over. 

Personally, I think there should be a ratio payment system. The
director or president should be paid according to some multiple of
what the lowest paid person in the company is paid. If they want more
money, they have to increase the wage of those at the bottom as well.

I suspect a big part of the problem is that these days, many people go
into management in a particular role with just a five year plan. In
five years time, they have moved off into a new position. Therefore,
they don't care about long term results - their objective is to reduce
costs and increase profits for 5 years so that they can get that next
promotion. They don't really care if their plans result in just short
term profits and less long term viability because they won't be there
in the long term. 

Your point about the level of debt is very relevant - especially in
the US at the moment. I was reading some trade figures and debt levels
for various industrialised countries and the US was looking the worst
out of them all. A lot of money is currently being borrowed to keep
things moving in the US economy and eventually, it will have to be
repaid somehow. The concern is that as the US has such a huge
influence on the rest of the worlds economies, if the US has a really
bad down turn, countries like Australia are also going to suffer. 

Tim


The Scarlet Wombat writes:
 > The only thing that business responds to nowadays is the bottom line.  This 
 > has largely been the case for a long time, but in the past, they were smart 
 > enough to couch it under the guise of concern for the employee, community 
 > and even the environment.  Now, it is a mad rush to profits so the stock 
 > can continue to go up in value.
 > 
 > The problem is that it is all built on a teetering pile of debt.  In his 
 > just released book, Empire of Debt, Addison Wiggan details how much trouble 
 > we are in as regards our debt system.  Every day, we require nearly four 
 > billion dollars of foreign money to keep our economy afloat.  The dollar is 
 > strong now, but how long cant his last?  Our corporations care nothing for 
 > eventual problems, they want to make all they can right now and if the 
 > worker bees end up out in the cold with no retirement, they do not give a 
 > flying you know what.
 > 
 > Dan 
 > 
 > 

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