Saturday, March 10, 2012

The Bastards Always Win

The late great author and blogger Joe Bageant had a very simple phrase to describe the Wall Street, banking and business elites who really run this country: The Bastards. Normally, The Bastards make an effort to disguise their naked wealth grabs with some kind of flimsy, business school approved smokescreen. Then there is The Bastard who is the CEO of Fifth Third Bank. First, lets take a look at this layoff notice that appeared Thursday in the Business Courier of Greater Cincinnati:
Fifth Third Bancorp conducted a round of job cuts impacting fewer than 200 employees across the company.

Downtown-based Fifth Third made the moves over the past 10 days, company spokeswoman Debra DeCourcy said. They occurred across its 12-state footprint.

The layoffs totaled “far less than 1 percent of our 22,000 employee population,” DeCourcy said.
That would put the total well below 220. She didn’t provide other details of the layoff.
Hmmm...that doesn't sound so bad. What was the official justification for the move?
DeCourcy explained the moves last week in an email responding to questions about rumored layoffs at Fifth Third:

“Our philosophy is to continually manage the deployment of staff and make adjustments where needed based on a variety of issues, including business demand, workload or technological advances,” she wrote in the email. “While we have had to reduce staff from time to time, this philosophy has enabled us to keep those numbers small relative to the overall size of our workforce of approximately 22,000 employees.”

Fifth Third and other banks have been cutting expenses lately to battle declining revenue. Fifth Third’s expenses rose 5 percent in the fourth quarter while revenue fell 6 percent. Several analysts said the bank, like many others in the industry, had already started to cut expenses and would need to do more trimming of costs.
All right, some typical Corporate FlackSpeak there, but nothing too extreme. Looks like they had to adjust to changing business conditions, right?

But wait, let's back up a week or so to an article from the very same publication, which appeared on February 28th of this very year:
Fifth Third Bancorp paid CEO Kevin Kabat $7.1 million in 2011, giving him a 49 percent compensation increase.

Kabat made $4.8 million in 2010, which represented an 8 percent pay cut from the prior year, according to figures reported in Fifth Third’s newly released proxy statement. Pay figures exclude a change in pension value and nonqualified deferred compensation earnings, even though the company has to report those figures to shareholders.
You can try to spin these two stories any way you want, but there is no other conclusion you can reach other than The Bastard CEO ordered the firing of over 200 of his employees so his bank could afford to give The Bastard a nice fat pay increase. I'll admit I never attended business school, but maybe some MBA out there could explain what possible justification there is for giving a CEO a 49% pay raise during a year when revenues declined by 6%. Good luck putting lipstick on that very ugly pig.

But wait, it gets worse:
Kabat can thank the bank’s repayment early last year of $3.4 billion it borrowed through the U.S. Treasury’s Troubled Asset Relief Program for part of the increase. That got the downtown-based banking company out from under federal restrictions on executive pay and allowed its executives to again qualify for bonuses and additional long-term incentive pay.

Kabat’s salary actually fell by almost half, to $1.6 million, last year, according to the proxy statement. That’s because the company halted its phantom stock program last year after it paid back TARP. Those phantom stock awards counted as salary. But his stock awards rose by two-thirds, to $2.6 million. He also received $1.8 million in stock appreciation rights, which Fifth Third couldn’t pay last year due to TARP. And he received incentive pay of $855,000 that was pro-rated to pick up where the phantom stock program left off.

Once Fifth Third paid back TARP, the compensation committee returned its pay structure to a mix of salary, bonus and long-term incentives “that is more consistent with its long-term approach and compensation philosophy,” said company spokeswoman Debra DeCourcy.
In other words, The Bastard's cushy CEO gig wouldn't even exist if taxpayers hadn't bailed out his asshole bank. And just how much of a pathetic toadie is company spokeswoman Debra DeCourcy? I got news for you, Ms. DeCourcy, you may think you have a great gig being the mouthpiece for The Bastard, but if the day should come when your salary is the one standing between him and his unjustifiable millions in compensation, you'll quickly find your ass out on the unemployment line as well. Because the first rule of business in modern day America is: The Bastards ALWAYS win.

Bonus: These are the kinds of Heartless Bastards I prefer. Play it, James


  1. Bageant sure had a great way of distilling it down to the basics.

    Something has been troubling me, though and this makes me think of it. Nomi Prins did this interview with Morris Berman in regard to his new book. His assertion is basically that it won't do any good for America to try and change because at its core, the nation is one of hustlers- always scheming for more resources of the worthless kind.

    It's probably the best description I've come across. I'm not trying to make an equivalence with the poor and the "bastards" but Berman makes the point that it's practically in the nation's dna to be this way. Perhaps that's why there isn't more outrage at this type of behavior.

    It's always about money and plots to get more. That's what higher education has become and most of the population views each other as a commodity to be mined.

    It hurts to admit this- you want to think if people just "wake up" it will get better. But deep down I think it's a fair characterization. You simply can't be a society that holds nothing to be valuable unless it increases the amount of stuff you own.

    I like to think after death all of us who aren't like that will go to a place where all the deviants of history reside. Those who said "umm don't cut down that last tree on Rapa Nui" or "let's not burn that witch" are all there and the whole thing was just a big joke/test to find the kind people. Hey, I don't believe it, I just like to think it!

    1. I read Berman's book and it is hard to disagree with him. There was an attempt to restrain the worst excesses and make the system more equitable from 1932-1981, but it's apparent that that was just an aberration.

      I like your vision of all of us who oppose the program going to our own unique heaven when we die. I imagine it would be a lot less crowded than the other place. :)

  2. I'll have to read that last book in his trilogy.....the first one was pretty damning.

    I keep thinking about the mention of the Donner party...the Native Americans who came across them, witnessed the disgrace and left with the comment "they eat each other".

    You know how some words are haunting....they have power and fright whenever they cross your mind---well those words give me chills.......just like Berman could be our epitaph.

    We eat each other.

  3. That is my bank, and I did not switch to a credit union because this bank seemed more local, more small town ish, is one of the rare one's rated 4 stars on bankrate, etc.

    This is the final straw, time to take my meager holdings elsewhere. Then again I might be a money loss to them, so maybe Kabat will be happy to see me go.

  4. I was one of the 200 employees impacted by the job cuts and have trouble with the 49% increase my former CEO rec'd..... If I were the CEO I would have saved as many of my employee's jobs as possible and not taken an increase (or at least waited until next year after the lay offs!!!). I am now in the unemployment line.....But still happy and I must say that 5/3 was fair with the package they gave us and other services offered. I am beginning to think I am the lucky one.....Not stressed anymore and loving life without 5/3.