williamczanderf.doc - Depersonalized Entitlement among CEO’s William Czander Ph.D “A capitalist under penalty of his own destruction must strive to

williamczanderf.doc - Depersonalized Entitlement among...

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Depersonalized Entitlement among CEO’s William Czander, Ph.D. “A capitalist under penalty of his own destruction, must strive to accumulate wealth” (Fenichel 1938, p.37 italics in original) Abstract Most CEOs have gone to business school and work with others who have taken classes in organizational and/or industrial psychology. They are familiar with the research exploring the negative consequences of salary inequity and the relationship between performance and pay. However, they continue to take entitlement to a level where they are accused collectively of gross insensitivity and greed. In this paper, I will discuss the psychodynamics associated executive salary demands and the motivation for CEOs to reward themselves after terminating employees. (Note from the author about the paper. Over the past year and a half the data I have collected about CEO pay is overwhelming. I have included this data in the paper but I have placed it at the end of the paper.) Introduction to the Problem In an ideal world we would have CEO’s who are knowledgeable, and who understand the meaning of their actions; who are moral people that embrace the great responsibility given to them with altruism. But in the last 10 years we have witnessed CEO behavior that is in some cases outrageous, destructive, immoral and criminal. It seems that CEO's are not very different from the rest of the population. Just as some people destroy their marriages, ruin their health, make bizarre and destructive decisions, we find CEO’s behaving unethical, engaging in irresponsible greed, and destroying the corporations they were chosen to lead. Americans are outraged at the spectacle of CEOs legally looting their companies with enormous pay and pensions, while their employees struggle with wages that fail to keep pace with inflation, and live with fear that decent health care will be lost and pensions will be taken. The situation has gotten so problematic that the March 7, 2008 the House of Representatives Oversight and Government Operations Committee held hearings in Washington DC. They invited Angelo Mozilo CEO of nearly bankrupt Countrywide Financial who gained $120 million in options in 2007 and $400 million during his tenure. He pledged to give back $37.5 million. Also invited was Stan O’Neal, former chief executive of Merrill Lynch & Co. He received $161 million in stock, options and retirement benefits after leaving the brokerage with its biggest-ever quarterly loss. Charles Prince, the former CEO of Citigroup received a $10 million bonus, $28 million in stock and options and $1.5 million in other perks when he left the bank last
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year after its stocks lost 58% of their worth. Combined, these three companies have lost $20 billion in 2007. Most employees of publicly traded companies may not know the salary of the guy in the cubical next to them but they all know what their CEO makes. According to Dietsch ( 2006 ) “ There are few secrets people guard more anxiously than their pay details. Even among work colleagues, open discussion about the size of their paycheques is the exception.”
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