Who's the big winner?
by digby
At least we can cling to the fact that the big winners in our economic lottery aren't decent people of good conscience:
The former top director at Progress Energy Inc. blasted merger partner Duke Energy Corp.'s quick change of CEOs after the deal closed, calling it "an incredible act of bad faith."
The comments, in a letter sent to the editorial page of The Wall Street Journal, came after Duke's board removed former Progress Chief Executive Bill Johnson from his post atop the combined company just hours after he started the job. The board then replaced him with Jim Rogers, who was Duke's CEO before the merger.
Mr. Johnson, 58 years old, had been slated to be CEO of the combined company since January 2011, when Duke and Progress announced their $26 billion merger. In fact, it was written into the merger agreement that he would take the top job.
"This was a critical element in the merger deliberations of our Board," John Mullin, former lead director of Progress, said in the letter. "I do not believe that a single director of Progress would have voted for this transaction as structured with the knowledge that the CEO of Duke, Jim Rogers, would remain as the CEO of the combined company."
Duke has said Mr. Johnson left by mutual agreement with the board.
In an interview Friday, Mr. Mullin accused former Duke directors who dominate the newly merged board of reneging on their commitment to make Mr. Johnson CEO of the combined enterprise.
"Being the CEO for a very short period of time and then being asked to resign so the former CEO could become CEO, that was not our understanding of what it meant for Bill to be CEO of the combined company,'' he said.
As reported in The Wall Street Journal, Mr. Johnson signed his employment contract on June 27, and it went into effect on July 2 when the deal closed. That afternoon, the new board, about two-thirds of which was made up by former Duke directors, met and decided Mr. Johnson needed to be removed from the top job, people familiar with the matter said...
Here's the kicker:
Despite his short-lived tenure, Mr. Johnson will receive exit payments worth as much as $44.4 million, according to Duke. That includes $7.4 million in severance, a nearly $1.4 million cash bonus, a special lump-sum payment worth up to $1.5 million and accelerated vesting of his stock awards, according to a Duke regulatory filing Tuesday night. Mr. Johnson gets the lump-sum payment as long as he cooperates with Duke and doesn’t disparage his former employer, the filing said.
Under his exit package, Mr. Johnson also will receive approximately $30,000 to reimburse him for relocation expenses.
Was this the deal all along? Does it matter?
My feeling is that this impulse to game the system has completely taken over the American ethos to such an extent that we now believe on some level that only a chump, a fool, wouldn't do it. In fact, it would be wrong not to. Or at least not obviously right.
This reminds me once again of a talk I had with a lawyer friend after the Bush vs Gore decision, in which I was bemoaning the destruction of the court and the very idea of our democracy. He replied to me quite sanguinely that "Americans love winners and they admire those who figure out a way to win. It doesn't matter how they did it, only that they did."
I was appalled. Still clinging to some semblance of idealism, I simply thought this was over-the-top. I don't think so anymore.. The old Vince Lombardi quote, "winning isn't everything, it's the only thing" is a very American sentiment. Taken to its natural conclusion, we have these vastly wealthy players recklessly spending vast sums of money not their own as if they're just. (Sound familiar?) And the man at the center of all this --- whether a player himself or a pawn --- wins big too. (He signed a self-serving contract and that makes him savvy --- and thus, deserving.)
And yet there remains this requirement for a puritanical work ethic for the poor. Indeed, many people seem to believe it is they who are the culprits in this breakdown of decency and conscience.(Nothing new there, of course.)But it's funny how it works. Poor people are losers if they even accept a government subsidy, while rich people are winners if they openly defy every norm of decent behavior and rig the system for themselves. Must be the money.
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