Go-away pay

Seeing the latest executive, this one with a last name of Falwell, walk away with “go-away” pay totaling $10 million, it reminds me of a broken recording playing the same song over and over again. Mr. Falwell left his leadership position because he embarrassed the reputation of Liberty University with his sexual activities with his wife and another. Could he have survived if the university was not a Christian founded one or his name was anything but Falwell? We will never know.

What further troubles many is Falwell was not fired for “cause” under his employment contract. He was let go with a severance payment. My educated guess is the Board of the university did not want to risk a law suit and fire him over cause. There are a few viable reasons for this conclusion. The directors may have their own employment contracts with their employers and do not want to go on record identifying what they think “cause” is. Another reason is money. The university may spend in legal fees and damaging publicity what they spend to make Falwell go away. It is easier to pay someone to go away. Plus, they have worked with him, so he earned some goodwill with the Board.

Yet, this is not new. It has happened since the invention of executive employment contracts. It is reported, Roger Ailes, the creator and president of Fox News, got $37 million in go-away pay after being credibly accused of multiple cases of sexual misconduct. Further, like other entertainment companies, it is reported Ailes tolerated an old-boys club where other “talents” also were accused of sexual misconduct. It is reported a famous “talent” was also paid go-away money, eg. Ailes could have been charged with “cause,” but refer to the reasons above as to why he was not. I would add a fourth for him as the Board wanted to honor his creation of this news/ entertainment network.

Sadly, it does not stop with sexual misconduct. CEOs can wreck a company’s reputation or financials and still walk away with go-away pay. I know of more than a few situations where this has occurred. And, the severance is usually a 1 to 2.99 times multiple of pay. The reason for the decimals is severance pay above 3 x compensation causes some tax issues. So, companies do what they can to keep the amount below that threshold.

Executive severance pay is a key feature of employment contracts. Most often it is deployed in merger situations where companies sell themselves and the leadership of the selling company walks away with golden parachutes. Having worked in consulting and in large companies, I can assure you that the executive ranks of a selling company spends too much time talking about severance at the expense of making the transition work. What is less an issue is these executives stopped trying to make their old company work and realized it was easier to sell and jump out of the plane with that golden parachute.

The further down the totem pole finds average workers who just get let go if they do wrong. Or, the severance pay may be only a few weeks of pay. So, having a contract means you can usually walk away with money when you make yourself expendable. Only when right-sizings, downsizings or RIFs (Reductions in Force) occur, do the lower paid folks walk away with a little more.

The unlearned lesson

Institutions have a bad habit of not learning lessons. The unlearned lessons may even be from their own history, yet they go unlearned or unheeded. Examples continue to pile-up like a stack of unread reports or emails.

To compile just a short list of such examples, consider the following organizations and what each failed to learn: the Catholic Church, Toyota, VW, Wells Fargo, Penn State University, Michigan State University, The Ohio State University, Congress and the current President just to name a few.

The Catholic Church has known about a significant problem for many decades with pedophile priests. Yet, protecting the institution was the first motivation, not stopping the abuse of children. Even after major scandals occurred in Boston and Ireland, signicant change did not occur to prevent future molestations.

The unlearned lesson is you focus on the abused as you fix the problem, not protecting the institution. When you address the problem openly and painfully, that is how you protect the institution. Cover-ups eventually fail, because the truth has a way of getting out.

Penn State, Michigan State and Ohio State are major universities and sports marketing franchises. Leaders within Penn State and Michigan State have known for years that there was a sexual predator in their midst. Yet, they chose not to act, trying to hide it from the public. As a result, more young boys, girls and teens were molested. By not addressing the problem, they brought appropriate shame to their marketing brands.

Ohio State has a similar issue with a physician who worked with the wrestlers. It has been known for years by athletes and coaches to avoid this doctor due to his practice of checking for testicular cancer for any visit, such as the flu, cold, fever, etc. Yet, nothing was done until several men came forward about their experiences.

For-profit companies are notoriously protective of their brands, but the better solution is to come clean and remedy the problem. Toyota was very slow on their floor rug braking problem. VW purposefully cheated emissions tests and were very slow to fess up after discovery. Many car companies who used Takata air bags also were slow to reveal a massive and deadly problem.

But, it is not just car companies. Banks and financial entities have experienced issues with aggressive and even illegal sales practices. Wells Fargo has justifiably gotten a lot of press for setting up false accounts as staff tried to keep jobs and earn bonuses. Bank of America and American Express have been fined for selling products and services that people did not request or need. And, pay-day lenders have a business model of excessive usury.

Even our governments have a hard time learning lessons. When the incumbent dishonors the office, the institution must penalize the incumbent. It matters not what party the incumbent belongs to. This applies to local, state and federal levels of government. It must apply to Congress and the White House. The punishment can vary from formal rebuke to censoring to removal from committees or from office.

Trust in institutions has waned. Some of this mistrust is due to hyperbole, such as what the current President has done to protect himself, but much is due to institutions not dealing with problems openly and appropriately. It also is due to them being more concerned with image than substance.

On this latter point, another unlearned lesson is the best way to keep your job is to do your job. And, when others don’t and/ or harm people, the institutions should fix the problem and let people know that they have. It is the right thing to do and avoids covering up and abetting criminality.

Saturday in the park salutations

Happy weekend. Saturday in the park is an idea worth considering. I will need to check with my better half regarding her thoughts for the day. Below are a few rambling thoughts to salute the news of the week.

Pakistan has selected a new leader, a very charismatic former cricket star named Imran Khan. He has promised to end corruption and offer better governance. I wish him well, but a reporter once said on NPR, the corruption is ingrained and corrupts the best of intentions. It should be noted his rivals are crying foul and want a new election.

Speaking of the best of intentions, Theresa May is trying to take Great Britain out of the EU with some semblance of a plan. It is surprising it has gotten this late in the game without more planning achieved. I still hold out hopes that the Brits will realize they screwed up and remain in the EU. Voters were not told of all the facts and I fault people like Boris Johnson, Nigel Farage and Vladimir Putin for their roles in deceiving folks. Decisions based on pride tend to lack prudence.

The now annual severe wildfires out west continue and are alarming. On the other end of the spectrum, stalled or slow moving weather patterns in the east are flooding various areas. In the middle of the country, severe heat is causing major concerns to drought areas. In 2011, a report put together by the largest pension trust managers in the world noted their financial concerns over not addressing climate change. They noted the increase in wildfires, concerns over severe droughts and stalled weather patterns as huge financial concerns. All of the above are a concern, but the fire and drought issues also shine a spotlight on our global water crisis, where certain areas around the world are in danger of diminishing access to fresh water. Yet, the leaders of our federal government are doing their best to avoid recognition or discussion of climate change action.

Another CEO, Les Moonves of CBS, has been accused of past sexual misconduct. It seems that men who lead (or are stars in) entertainment businesses that hire and promote attractive people cannot keep their hands and other body parts to themselves. Fox, NBC, Weinstein, and CBS have each had bad apples. But, as women know, this is a universal problem where men with power can impose their will on women in less senior roles. This is why the video of the waitress throwing the man, who felt up her fanny,  to the ground is so inspiring. He was held and charged with sexual battery.

Finally, the stand your ground law in Florida has caused yet one more death. A white man, who has taken it upon himself to accost people who park in handicap spaces, was shoved to the ground by a black man who took offense at his remarks. From the ground, the man is seen shooting (and killing) the shover. The man was not charged due to this law, which has caused a split on public opinion. Two questions – would opinion change if the races of the men were reversed?  Would a man be dead if a gun was not present?

Other news abounds, but I wanted to focus away from news that seems to suck all the oxygen out of the room.

 

 

Institutions and Organizations must do the right thing

My daughter is a college junior at a small college. She is flourishing in her environment and we could not be more proud. She has an enviable sense of right and wrong.

Right now she is frustrated with her college for failing to act when confronted by a sexual harassment claim by someone at the college. It was just reported the young woman and her family are suing the school and four officials. Apparently, the now former student’s harassment continued after she made her complaint with others joining in because her assailant was an athlete.

On top of this, Betsy DeVos, the Secretary of Education rescinded an Obama era requirement on colleges and universities to be more accommodating to those who file complaints. Now, more onus is placed on the victim to come forward, which will further stymie complaints.

Quite simply, institutions must stop protecting their image and do the right thing. In so doing, they will help their image by getting to the bottom of things. The Catholic Church greatly harmed themselves for decades by masking a huge problem. Penn State University failed to address a homosexual pedophile in one of their coaches after being aware of it for years.

Congress needs to do better at addressing sexual misconduct in their midst. And, our military, while doing better at addressing the tens of thousands of sexual misconduct claims, must take the added step of taking the investigation out of the chain of command or they will never reach where they need to be.

These numerous colleges and universities must do the right thing. Our daughters and sons deserve to be protected and their complaints heard. I told my daughter if something bad happens to you at the college, she should not go to the college police or town police and report it to the nearest city police. I believed this before I heard the latest news of the lawsuit.

Truth be told, small colleges are under significant financial pressures. Her college may have added to their pressures with a lawsuit which could have been avoided. Leaders must do the right thing. And, one thing they can start with is not look to leadership on this issue from the US Commander-in-chief. His reputation for sexual misconduct is renowned.

The more common sexual misconduct

Sexual misconduct awareness is arguably the story of 2017. Men of renown or in public service have been called on the carpet for past misdeeds, almost always losing their jobs or status. Yet, the more common stories are the countless male managers, supervisors or peers in a host of industries, retail stores, restaurants, manufacturing plants et al, who have preyed on women (and men) simply because the victims were powerless.

On Friday, a story hit the airwaves about Ford manufacturing plants where managers sexually assaulted and harassed female workers. Several allowed a culture of sexual harassment to occur and be perpetuated by peer male workers. A couple of examples stuck with me. A woman starting work would hear “fresh meat” being yelled at her by her male peers as she walked into the plant. Another woman said she had to sleep with her boss to get a schedule that would permit her to drop off and pick up her child from daycare.

For every Harvey Weinstein, Charlie Rose, Bill Cosby or Donald Trump, there are thousands of men who abuse their power and sexually harass women every day. The women have little choice as the jobs that pay the same are scarce. Or, they may be working for the main employer in a small town. So, many have to make a decision to acquiesce to a manager, put up with that environment or leave. Reporting the issue to HR may prove futile or backfire on the woman, especially if the employer has more clout in a small town.

Fortunately, more voices are being heard. We are at a tipping point, but it will have to be a long game to make the needed dramatic impact. As citizens, we must hold our leaders accountable. It matters not what tribe they belong to, meaning political party. As employees, we must not perpetuate or condone a sexual harassing environment, nor can we remain silent if we know of sexual assault.

The “times they are a changin” sang a Nobel prize winning songwriter in the 1960s. It could be sung now as well. But, maybe the anthem from a female songwriter from the early 1970s should be loudly vocalized. Helen Reddy sang, “I am woman hear me roar, in numbers too big to ignore.” Amen, sister.