By Paul Onomuakpokpo
At the height of the recession in 2008, those on the sidelines of
the corporate world were scandalised by the blithe ease with which chief
executive officers (CEOS) of companies, especially those in the United States were giving themselves
hefty compensation. This came in the form of robust salaries, bonuses,
stock option, severance pay and other benefits. Even those CEOs
whose remorseless mismanagement of their companies triggered financial
catastrophes that led to the collapse of their
institutions and the loss of jobs by thousands of workers gave
themselves robust reward packages. Of course, nobody would have
protested if the compensation the CEOs were giving themselves were a
reward for making their companies to meet their organisational goals,
even surpass them and bring prosperity to their shareholders and workers.
Even in Nigeria , in the
midst of the crisis, some CEOs, especially those of banks were busy buying
private jets and fancy vehicles for themselves and acquiring
properties all over the world. But after the Central Bank of Nigeria (CBN)
took over some of these banks, there were several allegations of how these CEOs
who were living big were actually deploying their organisations’ finances
including those of shareholders and depositors to cater to their lavish
lifestyles. While some of these CEOs were deprived of their banks, others
managed to return to those institutions in higher capacities as chairmen. But
before the crisis eased, some shareholders of these banks who sold their
houses and used all their life savings to invest in them had taken
their own lives.
Recent developments at
MTN, a telecommunications giant, evoke the sad memories of the global
recession. The MTN forced its CEO in South
Africa and his counterpart in Nigeria to resign when they bungled a
directive by the Nigerian Communications Commission (NCC) to
register the telephone numbers of its subscribers in Nigeria .
Outraged, the Nigerian government through the NCC asked the
company to pay a N1.4 trillion fine. The matter has dragged on, and
despite the MTN’s hiring of a U.S. attorney to negotiate
with the Nigerian government, no truce has been brokered. The crisis has
inflicted a heavy toll: the prices of the company’s shares have crashed on the
South African stock exchange, jobs have been lost and some
subscribers of the company have switched patronage. It was amid these
developments that the news broke this week that MTN has paid the two former
CEOs a severance package worth N560 million.
All these developments
tend to reinforce the notion that in the world of business there
is neither justice nor morality. Or else why should the CEOs who created
problems for the company be the ones to be rewarded while the other
stakeholders in the company, including employees and shareholders
are made to either suffer job loss or a cut in salary if at all they are still
employed while investors have the value of their shares whittled
down? In justifying the payment of CEOs after taking their organisations
through paths that are paved with calamitous consequences, there is often the
argument that they are experts who take risks on behalf of their companies. But
such an argument is invalidated in so far as whatever risk the CEOs may
have taken that does not redound to the bottom line of their companies should
elicit censure and not seeming approbation. Indeed, it is not because the
CEOs are right that they succeed in paying themselves heavy compensation
after making their companies to suffer huge losses. It is rather that
through a certain canny dispensation of favour to those who could have
challenged them, they rather get their support.