Sonja L. Ott – 3/29/09

This page was last updated on March 29, 2009.

Why are CEOs’ deals untouchable?; Sonja L. Ott; Beaver County Times; March 29, 2009.

Below is a detailed critique of the letter.

“In response to Wednesday’s article on Nova Chemicals CEO Jeffrey Lipton retiring with a $38.6 million pension when the company has employees laid off and is on the brink of bankruptcy, I have a real problem.”

[RWC] Nova Chemicals is not “on the brink of bankruptcy.” As noted in the subject article, Nova was “acquired by Abu Dhabi’s International Petroleum Investment Co. in a $2.3 billion deal.”

“Just what is this country coming to? I do not mind people who work for their money, but Lipton worked for 15 years, and I am sure he was paid a good salary. They said it was in his contract.”

[RWC] You have to love folks like Ms. Ott. Ms. Ott asks, “Just what is this country coming to?”, then proceeds to tell us an employment contract signed 15 years ago should be cancelled simply because she thinks it was too much.

Was Mr. Lipton compensated “too much?” I don’t know because I don’t know all the details. Mr. Lipton may have been overpaid, underpaid, or paid just right relative to his 15 years of performance. Regardless, that’s not the issue. If we’re going to turn contracts into little more than wish lists, what good are they?

“I worked as a salaried employee for more than 26 years at Horsehead Industries. Salaried employees were promised (by a contract) free hospitalization after 25 years. A few years ago, it was in bankruptcy, and all contracts were canceled. Even retirees who were getting free hospitalization had to start paying.

“If our contract could be broken, why can’t these companies break a contract? Look at the former steel companies that promised one thing and then reneged later on.”

[RWC] Ms. Ott answered her own question. The government can void contracts during bankruptcy proceedings. That’s because if the money isn’t there, it isn’t there. Otherwise, parties to a contract must abide by the terms of that contract. Nova Chemicals did not declare bankruptcy.

“Every couple of years, the rules are changed at these companies, but the CEOs still collect their large salaries and bonuses. This is while they have hourly employees laid off and they have fired salaried personnel.

“Does anyone have any control over these companies that are controlled by people of greed?”

[RWC] If I hear people like Ms. Ott complain about “greed” much more, I may need to wrap my head in duct tape to keep it from exploding.