financial crisis

High CEO Pay Comes Under Fire from Shareholders

By Michael Wood, Third and State

In the news today, a couple of instances of CEOs being taken to task by shareholders over excessive pay.

USA Today reports that at Citigroup, 55% of shareholders rejected or abstained from rubberstamping a $25 million payday for their CEO Vikrom Pandit. The vote is only advisory, unfortunely, but is still described as being "historic" for Wall Street firms in the aftermath of the recession. The report notes:

Wall Street's massive compensation packages have raised the ire of shareholders for years, especially when they appear to have little relation to the performance of specific executives. ...

"Citigroup is one of most egregious example of disconnect between incentives of top management and value creation of shareholders," said Mike Mayo, bank analyst at brokerage firm CLSA and author of the book "Exile on Wall Street."

"The owners of the big banks, namely the shareholders, are finally taking a greater amount of responsibility by speaking up."

Closer to home, the Pittsburgh Post-Gazette has a story this morning about discontent at Pittsburgh-based EQT's annual shareholder meeting. Again, executive compensation seems to be at the heart of this dispute — as well as unease about natural gas production. 

Bailouts for the Banks and Cake for the 99%

A blog post by Mark Price, originally published at Third and State.

What is good for the financial sector is good for the 99% 1%.

For the financialization of America wasn’t dictated by the invisible hand of the market. What caused the financial industry to grow much faster than the rest of the economy starting around 1980 was a series of deliberate policy choices, in particular a process of deregulation that continued right up to the eve of the 2008 crisis. Not coincidentally, the era of an ever-growing financial industry was also an era of ever-growing inequality of income and wealth. Wall Street made a large direct contribution to economic polarization, because soaring incomes in finance accounted for a significant fraction of the rising share of the top 1 percent (and the top 0.1 percent, which accounts for most of the top 1 percent’s gains) in the nation’s income. More broadly, the same political forces that promoted financial deregulation fostered overall inequality in a variety of ways, undermining organized labor, doing away with the 'outrage constraint' that used to limit executive paychecks, and more.

The Pittsburgh Post-Gazette reviews employment law in Pennsylvania and notes that there are two sets of rules, the rules for the rest of us (we are employed at will and rarely get a severance) and the rules for top executives.

Inside Job @ Philly For Change Movie Night: 11/17

This Wednesday, November 17 at 7:45, Philly For Change inaugurates Movie Night with a viewing of Charles Ferguson's much lauded documentary of Wall Street villains and the 2008 financial crisis, Inside Job, at the Ritz 5, 214 Walnut Street.

Join your Philly For Change friends as we make a night of it with the movie and dinner and discussion after at Pagoda, 125 Sansom Walk (by Ritz East).

Branch closings are not about the need for budget cuts.

Siobhan Reardon is very new to Philadelphia. She was brought here by the Free Library's Board and Trustees to finish the work of fundraising for the Moshe Safdie designed expansion of the Central Branch. Immediately upon arriving in Philadelphia she made an incognitio tour of all branches with a predetermined agenda of closing "weak" libraries (her words). The idea is that for years budget cutting has meant that the labor pool is stretched thin across the FLP system. With less library branches, services can be concentrated at the "strong" branches with the smaller labor pool that the city is able to fund.

I don't mean to put too fine a point on it, but from a highly educated middle class perspective most of these 11 branches are "weak" because their patron base is either too poor or too powerless to demand better services. While at the same time, the Central Branch or other higher profile "strong" branches have to share labor and material resources with these "weak" branches. This makes fundraising difficult if Central, City Institute, Chestnut Hill, Lovett, or any number of Northeast branches don't satisfy the needs of the wealthiest and most powerful Philadelphians.

The financial crisis has mostly served as a cover for a decision that had already been made by Reardon shortly after coming to Philadelphia. This is why we are getting such confusing opposition to the Friends' demand of a shared burden of reduced services, or why there seems to be such a lack of transparency. The only thing the city is forced by financial circumstance to do for budget cutting is to lay off workers (librarians, paraprofessionals, guards, etc) since their salaries and benefits make up the majority of the costs. Librarians and our professional associations will be hostile to the idea of managing libraries without degreed professionals, but that probably isn't even necessary.

There's also the canard that since Philadelphia's population has declined since its peak at 2 million in 1960, we can afford to "right-size". However, Philadelphia only had 39 branches in 1960. Some may say given that fact Philadelphia is then even more over saturated with libraries. But that's ridiculous. Several generations of tax-dollars have gone into an investment in our communities during the ensuing 50 year decline in population. Now we are now trying to squander investment in building up our neighborhoods despite decline, mostly because the FLP Administration is now committed to redistributing library services upward. It's theft! The intent of building branches from 1891 to 1960 and beyond was to build branches for neighborhoods, not simply to maintain some bogus national level of libraries per arbitrary geo-political boundary. Our system is being compared with young sun-belt suburban "cities" where everyone drives and frankly more people have attained higher degrees and reasonably could be said to not need to use "the People's University" as frequently as those on the other side of the wealth (let alone digital) divide. That we have the system that we do should not only be a point of pride, it should also be recognized as one of the few non-dehumanizing institutions of the "State" in many neighborhoods that poor people actually enjoy interacting with.

The administrators claim they want to create bookmobiles as a new innovative 21st century way of better serving the communities who will suffer when their branch closes. But book mobiles are really the ultimate insult to a dense urban community such as ours. They're better suited for rural and perhaps third-world situations where communities are too sparsely populated or resource-poor to be able to build libraries. We may be in a global financial crisis but do we need start dismantling our civic infrastructure at this point? The administration is basically saying Kingsessing should be treated like rural North Dakota: "Too few readers, too few tax dollars to sustain a library? Let's send the bookmobile every other week to the urban prairie we just bulldozed under Neighborhood Transformation Initiative!" Philadelphians paid for these buildings or we fought for them or they were given as gifts, we can't let the administrators take them away just to put some polish on branches in the most functional neighborhoods.

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