Stephen F. Kislock, III – 4/5/09

This page was last updated on April 13, 2009.

CEOs rewarded even when they fail; Stephen F. Kislock, III; Beaver County Times; April 5, 2009.

Most of Mr. Kislock’s 30+ letters over the last four years have been Republican-bashing exercises.

Below is a detailed critique of the letter.

“Former GM CEO Rick Wagoner, who was forced to bail out of his job by the federal government, had a $20 million golden parachute to cushion his fall.”

[RWC] “[F]orced to bail out” is Mr. Kislock’s euphemism for “fired.” “[G]olden parachute” is Mr. Kislock’s euphemism for “pension.”

According to USA Today, here’s what Mr. Kislock failed to note. “Wagoner, 54, is not eligible for the $20 million until he’s 60, … If GM goes into bankruptcy protection, only $833,000 of the pension is protected. Wagoner risks losing the rest in a bankruptcy settlement.”

“One man and one family — $20 million.”

[RWC] So what?

“Take the $20 million and divide by $50,000 in wages and benefits for GM hourly workers. This equals 400 jobs — 400 workers, most with families, mortgages and taxes to pay. What is the better bargain for America?”

[RWC] The $20 million is spread over a number of years and doesn’t start for another six years, even assuming it survives GM’s likely bankruptcy.

What is magic about $50,000? Why not more?

Why didn’t Mr. Kislock mention professional athletes and entertainers? After all, couldn’t reduced pay for these folks allow more money to be spent on hiring more staff? Couldn’t reduced paydays for entertainers allow for more people to be hired to produce a movie and keep the filming in the U.S.?

“CEOs and Wall Street financial gurus have a sacred contract that cannot be violated in any way. So said Larry Summers. Now, the American worker might have a contract, but at the whim of the company or federal government, it’s worthless.”

[RWC] Did you notice Mr. Kislock didn’t tell us who Larry Summers is? Mr. Summers is President Obama’s Director of the White House National Economic Council. Had an appointee of President Bush made a similar comment, Mr. Kislock’s Bush-bashing would have been severe. Since it’s an Obama appointee, however, Mr. Obama isn’t even mentioned.

Sorry, Mr. Kislock, the only time contracts can be voided is during bankruptcy. How much do you want to bet Mr. Kislock favored the government bailout of GM over bankruptcy?

“Why? Why can’t the American hourly worker make a good wage?”

[RWC] Is Mr. Kislock claiming American hourly employees don’t make a good wage?

“In his tenure as a GM executive from 1992 to March of this year, Wagoner had compensation of $63 million, an average compensation of $3.94 million a year. How may GM cars had to be sold just to cover Wagoner’s compensation?”

[RWC] Mr. Kislock talks about Mr. Wagoner’s “tenure as a GM executive from 1992 to March of this year,” but fails to note Mr. Wagoner worked at GM since 1977 and started out as an analyst in the treasurer’s department.

“Only in America is rewarding failure at the highest levels an honored practice. CEOs (chiefly enriching oneself) can fail and still be rewarded lavishly.

“We are in the same boat. We either right it or sink together.”

[RWC] Don’t get me wrong. Personally I believe a lot of people regardless of their position are paid too much. That said, except in the case of unionized employees, no one is forcing companies to pay their employees a lot of money. I’m just tired of the class warfare BS from folks like Mr. Kislock.