Greed is good. For a few people, at least.
Greed has certainly been good for executives and directors of Canada’s largest media conglomerate who have been looking after themselves while ordinary workers get screwed as the company restructures.
When Canwest filed for court protection against creditors for the TV portion of the company on Oct. 6, 2009, dozens of recently laid-off employees learned they would lose promised severance pay. For Pat Vanderburg, who has worked for CHBC TV in Kelowna, B.C. for the past 23 years, this will amount to a loss of over $95,000.
About 80 non-union retirees will lose promised Canwest-paid medical, dental and life insurance benefits. In addition, 120 former employees are facing reduced pensions.
Current shareholders, whose stock was worth $20 a few years ago (25 cents when trading was halted Oct. 6), will receive just 2.3 per cent of the new company when it emerges from the Companies’ Creditors Arrangement Act [CCAA] process.
Hundreds of suppliers, including Twentieth Century Fox (owed $8,524,006.05), Maple Leaf Sports & Entertainment ($485,803.70), CBC ($35,809.46), Mark Steyn Enterprises (US) Inc., ($428.04), Toronto Star ($95,627.64), Van Press ($55,877.77), Calgary Flames Foundation ($42,465.32), Adbusters Media Foundation ($9,060) and Pete’s Pest Control in Saskatoon ($54.60) will go into a line-up of unsecured creditors and receive a few cents on the dollar at best.
But three directors, four top executives and 13 other senior members of Canwest management will share $9.8 million in Key Employee Retention Plan (KERP) bonuses, in addition to their already substantial salaries, simply to keep working.
Of course this defies common sense, which tells all but those soaked in “business logic” that he who destroys a business should not be rewarded for it.
But the bonuses are but one manifestation of the ways in which the Canwest rich get richer through the power our economic and legal systems offer a corporate aristocracy. In addition to the bonuses:
- Certain “current and former management employees” who were participants in the Canwest Global Communication Corp. and Related Companies Retirement Compensation Arrangement Plan were paid out, on Sept. 4, 2009, the approximately $47 million promised to them. (Part of the payment will be made later, after a tax refund from Revenue Canada.)
- Certain unnamed Canwest senior executives will continue to receive their current benefits until at least one year after the company emerges from CCAA and then retirement benefits for life. (The cost per year of these benefits is blacked out on documents.)
- Canwest directors will be protected against any financial liability, up to $20 million. This protection receives priority over almost every other debt the company owes.
Incredibly, when the newspaper side of the business also enters CCAA, more such examples of Canwest executives helping themselves to the last tasty remnants of a corporate carcass will likely be revealed.
Those with the power to look after themselves have done so and it is all deemed perfectly legal. In fact, the “insolvency system” seems designed to allow a select few to have one more big slurp from the bowl of gravy, along with the lawyers and other bankruptcy specialists. How else to explain the KERPs that are an ordinary part of the insolvency process in Canada?
Of course, would you expect anything different from an economic system that proudly trumpets: “Greed is good!” Or from a legal system designed, shaped and paid for by those with the most wealth to protect?
In fact, greed seems to be the one constant as corporate empires are built and then destroyed.
The problem is that the logic of greed means they’ll stop only when nothing is left. If we don’t soon rein in the greedy, they’ll take everything: Our wealth, our health, even our planet.
It’s at moments like this, while light is shone on the unfairness of the system and its excesses and absurdities, that we need to consider our core principles.
Perhaps need should replace greed as the foundation of our economy. Perhaps equity and one-person-one-vote should replace wealth and one-dollar-one-vote as our way of governing the essential institutions that we call corporations. Perhaps a half measure of common sense could replace “business logic.”