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Do Not Pay Dozen: 12 CEOs Who Met Shareholder Spring Revolts

Posted by Pratap Chatterjee on June 14th, 2012
CorpWatch Blog
Cartoon by Khalil Bendib

Martin Sorrell, CEO of WPP, the global ad agency, was defeated Wednesday in his attempt to get shareholders to approve his $20 million (£13 million) a year salary. He was at least the 12th CEO to face a shareholder revolt against excessive compensation this spring.

“Ever since the first revolts erupted in earnest this year, the “shareholder spring” has been searching for its own Hosni Mubarak to rally against,” writes Jonathon Ford in the Financial Times. “Now a suitably pharaonic candidate has emerged in Sir Martin Sorrell.”

WPP began life as Wire and Plastic Products plc in 1971, as a company that manufactured wire shopping baskets, but was bought out in 1985 by Martin Sorrell, former finance director of Saatchi & Saatchi. Today it is one of the most powerful ad agencies in the world, after having bought up some of its most famous rivals like Burson-Marsteller, Grey, Hill & Knowlton, JWT, Ogilvy Group and Young & Rubicam. Sales in 2011 hit £10 billion ($16 billion)

Sorrell defended his salary in a June 5 Financial Times commentary titled "I Act Like The Owner That I Am." "I find the controversy over my compensation deeply disturbing. Some imagine that I wake up every morning and make decisions, including those over compensation, in the shaving mirror ... If the government or institutions believe pay is excessive, tax it. Do not fiddle with the market mechanism. WPP is not a failure, it is a success."

A week later, some 60 percent of shareholders voted against Sorrell’s pay package. The revolt “appeared to stun the board directors as they watched the results appear on TV screens” wrote the Independent. (The directors were meeting on Wednesday in Dublin, where the company is headquartered to avoid taxes)

"People are concerned because there is a recession, they're concerned about inequality, inequality of wealth and incomes,” a suitably chastened Sorrell told a Reuters meeting in Paris on Thursday. “At times of recession people become more concerned about that, you see that politically.”

Here is the CorpWatch list of CEOs who have seen significant shareholder votes against their multimillion dollar salaries so far this spring.

* David Brennan, CEO of AstraZeneca, the Anglo-Swedish pharmaceutical company, resigned April 26 after shareholders voted against his £9 million pay ($14.4 million)
* Andrew Moss, CEO of Aviva, the top UK insurance company, was forced to resign on May 8 after he lost a vote against his £2.7 million ($4.3 million) pay package
* Sly Bailey, CEO of Trinity Mirror, the UK’s biggest newspaper group, decided to step down May 3 after shareholders voted against her £1.7 million ($2.7 million) pay
* Vikram Pandit, Citibank’s CEO, faced a revolt against his proposed salary of $15 million from some 55 percent of shareholders
* Brady Dougan, CEO of Credit Suisse, saw his salary slashed in half to $6.37 million
* Bill Gammell, founder of Cairn Energy, lost share options worth £2.5 million ($4 million) after 67 percent of shareholders voted against his pay package
* Mike Davies, chairman of Pendragon, a UK car dealership, saw 25 percent vote against his salary
* Andrew Sukawaty, the executive chairman of Inmarsat, the satellite phone company, saw a shareholder revolt against his £2.66 million salary ($4.25 million)
* Ralph Topping, CEO of William Hill, a major UK betting company, saw 49.9 percent of shareholders vote against his £1.2 million ($1.92 million) pay package
* Ivan Glasenberg, CEO of Swiss mining company Xstrata
* Kaspar Villiger, chairman of UBS bank in Zurich

Shareholder Spring Spreads: CEOs Ousted in the UK, Bank of America Protested

Posted by Pratap Chatterjee on May 9th, 2012
CorpWatch Blog
Bank v America Boxing Match. Photo: Jed Brandt. Used under Creative Commons license.

Thousands of community activists gathered in Charlotte, North Carolina, on Wednesday to protest at Bank of America’s annual shareholder meeting. A boxing match billed as “Bank v America” was staged outside while inside, protestors from the mountains of Appalachia to homeowners in Ohio stood up to speak out against the company.

This is the latest in what has been perhaps the most diverse, widespread and sizeable protests of corporate annual meetings around the world to date. Traditionally these company gatherings are held in the spring after the publication of annual reports in April of each year. They tend to be dull affairs hosted by company management and attended by analysts from Wall Street and the City of London and a handful of shareholders.

Occasionally, church groups and environmental groups attend to speak out in favor of progressive resolutions that gather no more than five percent of votes from the big institutional investors who own the bulk of company shares. And sometimes there are a rallies outside led by the same groups.

But the scale of the protests 2012 has been different, first because of the return of the Occupy protestors who were evicted by police or winter conditions. These activists have bolstered the numbers outside the annual general meetings: in Detroit, hundreds of Occupy protestors marched to protest General Electric on April 25, 2012 to protest the way the company avoids paying taxes. Occupy also turned out in force to protest Peabody Coal in St. Louis, Missouri and Wells Fargo Bank in San Francisco last month.

We wrote about some of the initial protests last month:

“Wearing blue eagle masks and garlands of money, protestors gathered outside the Barclays bank shareholder meeting in London, while a giant, cigar-smoking inflatable rat accompanied activists at the Wells Fargo annual meeting in San Francisco. Meanwhile shareholders in Dallas voted overwhelmingly against a multi-million dollars pay package for Citibank’s CEO while almost a third did the same at the Credit Suisse meeting in Zurich.”

In the last week or so, this anger has spread, led surprisingly by institutional shareholders. The Financial Times and the Telegraph newspaper in the UK have labeled the phenomenon “shareholder spring” in which a number of CEOs have seen their multi-million dollar pay packages voted down under so-called “say on pay” rules that allow shareholders to reject excessive payments. In a May 4 editorial titled “Irresistible Rise of the Angry Investor” the Financial Times says: “Shareholders want executives to perform for their pay. Is that so much to ask?”

In a similar vein, the Observer newspaper in the UK noted: “Just weeks after the Occupy protesters were chucked out of the City, the sharp-suited fund managers who picked their way through the tents to get to their desks each morning have staged their own protest against fat-cat capitalism. On Thursday alone, five companies felt the wrath of investors and suffered revolts over their pay policies.”

The list of companies affected to date is impressive: more than half of the shareholders of Aviva, the top UK insurance company, voted against the pay package of Andrew Moss, the CEO, forcing him to resign. Sly Bailey, CEO of Trinity Mirror, the country’s biggest newspaper group (publishers of Daily Mirror, Sunday Mirror and People as well as the Sunday Mail in Scotland) has decided to step down after shareholders are expected to vote against her £1.7 million ($2.7 million) pay tomorrow. David Brennan, CEO of AstraZeneca, the Anglo-Swedish pharmaceutical company, has decided to retire early for the same reasons and Ralph Topping, the CEO of William Hill, a major UK betting company, is hanging on for dear life after 49.9 percent of shareholders voted against his £1.2 million ($1.92 million) pay package.

Last week saw significant protest votes against Kaspar Villiger, chairman of UBS bank in Zurich, and Ivan Glasenberg, the CEO of Swiss mining company Xstrata, on May Day. Two days later Andrew Sukawaty, the executive chairman of Inmarsat, the satellite phone company, saw a shareholder revolt against his £2.66 million salary ($4.25 million) and 3M, makers of Scotch Tape, saw protests against the companies corporate lobbying in St. Paul, Minnesota yesterday.

Next month Sir Martin Sorrell, the CEO of advertising giant WPP, who is paid £13 million a year ($21 million) expects to see protests when the company holds its annual meeting on June 13.

It’s not just CEOs, board members have also come under fire. Alison Carnwath, a banker who sits on many UK boards, was protested at both Barclays bank as well as at hedge fund Man Group. “Alison Carnwath is the embodiment of "crony capitalism" that allows a small group of City figures to set each other's pay and bonuses without having to worry about the real world” wrote Jill Treanor and Rupert Neate in the Guardian.

One of the reasons that executives have managed to get away with excessive pay packages so far is the nature of corporate boards. Lord Myners, the former head of a hedge fund, told the Observer that the problem lay with the fact that company boards are handpicked by the chairman: "(W)e have the North Korean model, in which each candidate is re-elected every year, and 99.99% of them get voted in with 99.99% of the vote.

Stay tuned: tomorrow we will have more reports on the protestors on the outside – at the Bank of America annual meeting in Charlotte and the Enbridge meeting in Toronto, Canada.

Bankers Bonanzas Protested By Blue Eagles and A Cigar-Smoking Rat

Posted by Pratap Chatterjee on April 27th, 2012
CorpWatch Blog
Photo: Alex Milan Tracy. alexmilantracy.com

Wearing blue eagle masks and garlands of money, protestors gathered outside the Barclays bank shareholder meeting in London, while a giant, cigar-smoking inflatable rat accompanied activists at the Wells Fargo annual meeting in San Francisco. Meanwhile shareholders in Dallas voted overwhelmingly against a multi-million dollars pay package for Citibank’s CEO while almost a third did the same at the Credit Suisse meeting in Zurich.

Annual general meeting season is in full swing and hundreds of people are showing up to protest excessive pay at banks around the world. The numbers have swollen from years past with the vigor injected from the long summer of Occupy protests around the world in 2011 that protested the failure of government to tackle the economic crisis and reign in private capital.

In London, activists with the World Development Movement and Robin Hood Tax, dressed up with blue eagle masks (mimicking the company’s logo) gathered outside the Royal Festival Hall. Some 800 shareholders attended the meeting where they heckled Bob Diamond, the CEO who was paid just shy of $28 million last year. One woman described the bank as “"ruthless, heartless, cruel" while another investor yelled: "You are all part of the same club.”  Almost 27 percent voted against the company’s proposed pay package.

In Zurrich some 1,750 shareholders attended the Credit Suisse annual meeting on Thursday where almost a third of the votes recorded rejected individual pay packages as high as $9.35 million (for Robert Shafir who heads up the asset management team) "You should be ashamed of yourselves for taking so much money away from us," said Rudolf Weber, a shareholder, who spoke up during the meeting. “We are the owners of this bank, and you are our employees. We should be the ones who decide what you earn.”

On Tuesday Vikram Pandit, the CEO of Citibank, faced a revolt against his proposed salary of $15 million. Some 55 percent of shareholders voted against - the first time in history that a pay proposal at a major U.S. bank has been voted down since the law was amended to allow such voted under the Dodd-Frank act of 2010. Two days later, Stanley Moskal, a Citi shareholder, sued Pandit and the Citibank board for breaching their fiduciary duties stating that the vote had “cast doubt on the board's decision-making process, as well as the accuracy and truthfulness of its public statements."

The same Tuesday, thousands of activists gathered in San Francisco outside the Wells Fargo annual meeting at the Merchants Exchange Building to protest the bank which is the second-largest U.S. bank as measured by deposits. The crowd was joined by a fake stagecoach (the bank’s logo that reflects its Gold Rush history) labeled “Hell’s Cargo” and a giant cigar-smoking inflatable rat. A small group linked arms to prevent shareholders from attending the meeting while others went inside to protest. A total of 24 protestors – 14 inside the meeting and ten outside – were arrested.

"Wells Fargo is one of the largest and most corrupt Wall Street banks and has foreclosed on hundreds of thousands of homes," Charles Davidson of Move On East Bay told Reuters. "I think it's really important that we stand up to this or the economic crisis will continue."

However Wells Fargo shareholders failed to rally against CEO John Stumpf’s salary where over 90 percent voted for his $19.8 million pay package.

Barclays Bankers Bonanza

Posted by Pratap Chatterjee on March 15th, 2012
CorpWatch Blog
£50 banknotes. Photo: Images_of_Money. Used under Creative Commons license

Rich Ricci, Jerry del Missier and Bob Diamond took home paychecks of $15 million or more from Barclays bank last year, continuing a tradition of excessive pay in the UK. Bob Diamond, the CEO, made just shy of $28 million (£17.7 million), while Jerry del Missier and Rich Ricci, co-heads of Barclays Capital, made $17 million (£10.8 million) and $15 million (£9.7 million), respectively.

Of course this pales compared to what U.S. hedge fund managers make  - Raymond Dalio of Bridgewater Associates was paid an estimated $3 billion in 2011, Carl Icahn of Icahn Capital Management earned $2 billion. The top European hedge fund manager in 2011 was Alan Howard of Brevan Howard Asset Management, who earned $400 million last year. All told, the 40 highest paid hedge fund managers were paid a combined $13.2 billion in 2011, according to a Forbes magazine survey.

Such pay-outs make Goldman Sach’s vice president Greg Smith’s estimated salary of $500,000 look like pocket change.

The UK salaries have become public knowledge because of a pact made by the banking sector with the UK government, as part of Project Merlin signed in February 2011. The plan – named after the fictional wizard – was intended to boost bank lending for small businesses. The project has been a failure so far with lending falling every quarter instead.

Yet Project Merlin has been successful in revealing how well bankers are paid, often despite doing very badly for investors, he most scandalous revelation so far comes from the Royal Bank of Scotland (RBS), which received $70 billion (£45 billion) of taxpayer funds. Despite the fact that the loss-making bank is now effectively 83 percent state owned, RBS handed out shares worth almost $44 million (£28 million) to nine of its top executives in 2010. All told it paid out nearly $1.5 billion (nearly £1 billion) to its senior employees – even as it reported losses of $1.7 million (£1.1 billion) for 2010 and slashed pension payments to its employees.

Shareholders protested at the RBS annual meeting last April. "You should not be paying yourselves anything until the debt is paid off to the government and to the people," said one attendee, characterising the pay scales as "really obscene to the degree of greed and corporate theft."

And it's not just the average citizen who thinks salary levels are excessive. Three out of four financial workers in the City of London who responded to a survey by St Paul's Institute thought the wealth divide was too big.

In 2010, five of Barclays top managers also shared a payout of £110 million. That year, the bank's top two earners were also Jerry del Missier and Rich Ricci , who made over $15 million each last year. It needs to be noted that Ricci, del Missier and Diamond are not the highest paid people at Barclays. That distinction goes to company traders, whose salaries do not have to be revealed under UK rules (as opposed to bankers).

Perhaps one of the most curious facts to emerge from the banker’s pay scandals in the UK are the fact that some of the bankers are employed and paid outside the banks themselves. For example Stuart Gulliver, HSBC's highest paid banker, is not employed by the bank's main holding company despite taking over as chief executive but by a Dutch-based company called HSBC Asia Holdings. Part of his salary is paid into a Jersey-based defined contribution scheme called Trailblazer . And Bob Diamond, chief executive of Barclays, is seconded to the bank from a Delaware subsidiary known as Gracechurch. The banks say that there is no tax benefit to the arrangement.

The Financial Re-Regulatory Agenda

Posted by Robert Weissman on September 23rd, 2008

As the Federal Reserve and Treasury Department careen from one financial meltdown to another, desperately trying to hold together the financial system -- and with it, the U.S. and global economy -- there are few voices denying that Wall Street has suffered from "excesses" over the past several years.

The current crisis is the culmination of a quarter century's deregulation. Even as the Fed and Treasury scramble to contain the damage, there must be a simultaneous effort to reconstruct a regulatory system to prevent future disasters.

There is more urgency to such an effort than immediately apparent. If the Fed and Treasury succeed in controlling the situation and avoiding a collapse of the global financial system, then it is a near certainty that Big Finance -- albeit a financial sector that will look very different than it appeared a year ago -- will rally itself to oppose new regulatory standards. And the longer the lag between the end (or tailing off) of the financial crisis and the imposition of new legislative and regulatory rules, the harder it will be to impose meaningful rules on the financial titans.

The hyper-complexity of the existing financial system makes it hard to get a handle on how to reform the financial sector. (And, by the way, beware of generic calls for "reform" -- for Wall Street itself taken up this banner over the past couple years. For the financial mavens, "reform" still means removing the few regulatory and legal requirements they currently face.)

But the complexity of the system also itself suggests the most important reform efforts: require better disclosure about what's going on, make it harder to engage in complicated transactions, prohibit some financial innovations altogether, and require that financial institutions properly fulfill their core responsibilities of providing credit to individuals and communities.

(For more detailed discussion of these issues -- all in plain, easy-to-understand language, see these comments from Damon Silvers of the AFL-CIO, The American Prospect editor Robert Kuttner, author of the The Squandering of America and Obama's Challenge, and Richard Bookstaber, author of A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Financial Innovation.)

Here are a dozen steps to restrain and redirect Wall Street and Big Finance:

1. Expand the scope of financial regulation. Investment banks and hedge funds have been able to escape the minimal regulatory standards imposed on other financial institutions. Especially with the government safety net -- including access to Federal Reserve funds -- extended beyond the traditional banking sector, this regulatory black hole must be eliminated.

2. Impose much more robust standards for disclosure and transparency. Hedge funds, investment banks and the off-the-books affiliates of traditional banks have engaged in complicated and intertwined transactions, such that no one can track who owes what, to whom. Without this transparency, it is impossible to understand what is going on, and where intervention is necessary before things spin out of control.

3. Prohibit off-the-books transactions. What's the purpose of accounting standards, or banking controls, if you can evade them by simply by creating off-the-books entities?

4. Impose regulatory standards to limit the use of leverage (borrowed money) in investments. High flyers like leveraged investments because they offer the possibility of very high returns. But they also enable extremely risky investments -- since they can vastly exceed an investor's actual assets -- that can threaten not just the investor but, if replicated sufficiently, the entire financial system.

5. Prohibit entire categories of exotic new financial instruments. So-called financial "innovation" has vastly outstripped the ability of regulators or even market participants to track what is going on, let alone control it. Internal company controls routinely fail to take into account the possibility of overall system failure -- i.e., that other firms will suffer the same worst case scenario -- and thus do not recognize the extent of the risks inherent in new instruments.

6. Subject commodities trading to much more extensive regulation. Commodities trading has become progressively deregulated. As speculators have flooded into the commodities markets, the trading markets have become increasingly divorced from the movement of actual commodities, and from their proper role in helping farmers and other commodities producers hedge against future price fluctuations.

7. Tax rules should be changed so as to remove the benefits to corporate reliance on debt. "Payments on corporate debt are tax deductible, whereas payments to equity are not," explains Damon Silvers of the AFL-CIO. "This means that, once you take the tax effect into account, any given company can support much more debt than it can equity." This tax arrangement has fueled the growth of private equity firms that rely on borrowed money to buy corporations. Many are now going bankrupt.

8. Impose a financial transactions tax. A small financial transactions tax would curb the turbulence in the markets, and, generally, slow things down. It would give real-economy businesses more space to operate without worrying about how today's decisions will affect their stock price tomorrow, or the next hour. And it would be a steeply progressive tax that could raise substantial sums for useful public purposes.

9. Impose restraints on executive and top-level compensation. The top pay for financial impresarios is more than obscene. Executive pay and bonus schedules tied to short-term performance played an important role in driving the worst abuses on Wall Street.

10. Revive competition policy. The repeal of the Glass-Steagall Act, separating traditional banks from investment banks, was the culmination of a progressive deregulation of the banking sector. In the current environment, banks are gobbling up the investment banks. But this arrangement is paving the way for future problems. When the investment banks return to high-risk activity at scale (and over time they will, unless prohibited by regulators), they will directly endanger the banks of which they are a part. Meanwhile, further financial conglomeration worsens the "too big to fail" problem -- with the possible failure of the largest institutions viewed as too dangerous to the financial system to be tolerated -- that Treasury Secretary Hank Paulson cannot now avoid despite his best efforts. In this time of crisis, it may not be obvious how to respect and extend competition principles. But it is a safe bet that concentration and conglomeration will pose new problems in the future.

11. Adopt a financial consumer protection agenda that cracks down on abusive lending practices. Macroeconomic conditions made banks interested in predatory subprime loans, but it was regulatory failures that permitted them to occur. And it's not just mortgage and home equity loans. Credit card and student loan companies have engaged in very similar practices -- pushing unsustainable debt on unreasonable terms, with crushing effect on individuals, and ticking timebomb effects on lenders.

12. Support governmental, nonprofit, and community institutions to provide basic financial services. The effective governmental takeover of Fannie Mae, Freddie Mac and AIG means the U.S. government is going to have a massive, direct stake in the global financial system for some time to come. What needs to be emphasized as a policy measure, though, is a back-to-basics approach. There is a role for the government in helping families get mortgages on reasonable terms, and it should make sure Fannie and Freddie, and other agencies, serve this function. Government student loan services offer a much better deal than private lender alternatives. Credit unions can deliver the basic banking services that people need, but they need back-up institutional support to spread and flourish.

What is needed, in short, is to reverse the financial deregulatory wave of the last quarter century. As Big Finance mutated and escaped from the modest public controls to which it had been subjected, it demanded that the economy serve the financial sector. Now it's time to make sure the equation is reversed.

http://www.multinationalmonitor.org/editorsblog/

Robert Weissman is managing director of the Multinational Monitor.



Bye, American

Posted by Mark Floegel on March 19th, 2008


You might have heard the story about General Motors Vice Chairman Bob Lutz. At a recent closed-door meeting with reporters, the 76-year-old, who’s in charge of product development said he thinks global warming theory is “a total crock of sh*t” and that hybrid cars “make no economic sense.”

As you might expect, the people who cover both the auto industry and the environment went nuts. Mr. Lutz eventually responded to the uproar with a post on GM’s blog site (or at least a 26-year-old administrative assistant posted a response for him).

In the blog, Mr. Lutz called his remarks “an offhand comment.” “But I think that the people making a big deal out of it are missing the real point,” he wrote. “My beliefs are mine and I have a right to them, just as you have a right to yours.”

I don’t think anyone’s questioning Mr. Lutz’s right to have an opinion. I think, instead, when Mr. Lutz was kind enough to treat the world to his unvarnished thoughts, we all had an “Aha!” moment explaining why Toyota is overtaking GM as the world’s largest automaker.

Hybrid vehicles “make no economic sense” to Mr. Lutz, who undoubtedly basks in a bloated bath of cash thanks to his salary ($8 million per year), bonus and perks, but the for rest of us poor schmucks, trying to pony up what will soon be four dollars per gallon at the pump, hybrid cars make a world of economic sense and again, explains why Toyota is eating Mr. Lutz’s lunch.

“Instead of simply assailing me for expressing what I think, they should be looking at the big picture,” Mr. Lutz wrote. “What they should be doing, in earnest, is forming opinions not about me but about GM, and what this company is doing that is — and will continue to be — hugely beneficial to the very causes they so enthusiastically claim to support.”

Really? As fate would have it, I’ve driven three rental cars in the past week. One was a Hyundai Sonata, one a Dodge Avenger and one a Chevrolet Cobalt, from Mr. Lutz’s beloved GM.

The Cobalt was – to paraphrase Bob Lutz – a total piece of sh*t. It was cramped, handled poorly; the interior was made of such cheap plastic that I was afraid I’d a) die from off-gas fumes or b) snap off the handle when I went to open the door. The icing on this cake of deficiency was the fact that the little monster sucked down gas like a fleet of overloaded semis. Yet another wonderful product from GM, polluting the atmosphere and making people poor and miserable while it careens toward an early grave in the junkyard. Thanks, Bob.

My favorite – by far – was the Hyundai. It was comfortable, roomy, responsive and got decent gas mileage. The Dodge fell somewhere in between.

Mr. Lutz wrote, “My opinions on the subject [of global warming] — like anyone’s — are immaterial. Really.”

Really? GM pays you eight million dollars a year and doesn’t give a sh*t (I hate to keep using this word, but you brought it up, Bob) what you think?

And, really? Everyone’s opinion on global warming is immaterial? Perhaps that’s true. No one’s opinion counts except that of the decider, George W. Bush and he’s decided we need to keep pumping oil and mining coal.

Bob Lutz is a walking embodiment of what’s wrong with America’s industrial policy. He’s got his head so far up his own ass that everything looks like a crock of sh*t to him. Someone find this bozo a gold watch and let’s get on with trying to save ourselves from the internal combustion engine.

http://markfloegel.org/2008/03/06/bye-american/ 

How We Got Here: Post-Doctoral Division

Posted by Brooke Shelby Biggs on June 16th, 2006

The New Left Review will either excite or exhaust your brain. But if you want to see the rise of capitalism on a global scale through the eyes of an economist who speaks economese, this is your guy: Robin Blackburn. I'm not saying I understood the whole thing (I wonder if many outside the ivy-clad ivory towers could), but the whole issue of how corporations came to be the driving force in almost everything in the world, and how money became both the ends and the means to all things, is somewhere here between the lines.

The NLR summarizes the piece thusly: "The concept of alternative futures, banished from postmodernity’s eternal present, flourishes on the financial summits of the global economy. Robin Blackburn argues against a neo-Luddite dismissal of the new financial engineering techniques by the Left, while coolly assessing the economic and social costs of their current configurations."

Uh-huh. I almost said that.

The gist is, once you see everything - people, the environment, cultures - as commodities, it all makes perfect sense. Of course, money doesn't have a soul.

Therefore, this begins to appear to be a genius corporate philosophy:

In the years 2001–03 about three million jobs were lost in the United States. By the turn of the century Enron’s managers had become famous for a regime in which each employee knew that one tenth of the staff, those who failed to reach trading targets, would be sacked each year, no matter how good or bad the overall performance. Many of the most powerful corporations today do their best to avoid having a workforce; instead they out-source and sub-contract.

We've seen see how well that works.

Ultimately, the soveriegnty of financial institutions that make this entire "financialization" thing work, actually causes corporations and the system they have creates, self-destruct (see Enron, WorldCom, Delphi et al):

[F[inancial profits over the last decade have mainly taken the form of the cancellation of promises made to employees—exploitation over time—the erosion of small capital holdings by large and unscrupulous money managers and the swallowing of shoals of tiny fish by a shark-like financial services industry. Few of the gains from the reallocation of capital through superior risk assessment have been channelled to production. Financial profits have instead prompted a surge in upscale real-estate prices and the turnover of the luxury goods sector. The mass of employees and consumers have sunk deeper into debt. Yawning domestic inequalities have been compounded by escalating international imbalances, with an inflow of foreign capital covering a deficit on the us current account. With a sagging dollar, an oil price shock and rising interest rates, American households—the consumers of first and last resort—are likely to find the strain of carrying the world on their shoulders ever more difficult. Financialization promotes such a skewed distribution of income that it ends by undermining its own credit-driven momentum.

Took the words right out of my mouth.