Corporate irresponsibility in this country has simply gotten out of hand. This is evident in viewing two areas of concern. The first area is the average pay of a Fortune 500 CEO in America, and the second is the litigation choices exhibited by these companies when they violate a consumer's rights, especially in bankruptcy. The contrast is none too stark because what it indicates is that the most financially viral among us tends to trample on and take advantage of the most financially vulnerable among us. It is fine to say that these financially vulnerable who have had their rights knowingly violated are just after money, or that their lawyers just want to get paid. But, is that not the pot calling the kettle black? After all, was it not all about money that the company elected to violate the debtor's rights in the first place? I would hope it was not about simply making the poor debtor suffer for no particular reason much like pulling the wings off a fly. As former U. S. Senator Dale Bumpers said during President Clinton's impeachment hearing, "When they say it is not about money...its about money".
The great economist John Kenneth Galbraith just past away. He understood the problem well. In a 2002 interview with The Independent he argued that the modern corporations have become so complex it is impossible to hold them sufficiently accountable. It is this complexity that prevent the corporations in the first place from complying with a consumer's or debtor's federally mandated rights. They simply do not care or the cost of insuring compliance is simply not justified in their minds. It really is the simple idea that their will is better than any right granted to the consumer or debtor. Also, judges too often simply fail to hold corporations sufficiently responsible. The corporations' attorneys argue about insignificant sums of money to the debtor as if it is life changing for the corporations before the Court. It is life changing for the debtor. It is amazing what $500.00 or $1,000.00 can do for a debtor when his or her rights have been willfully violated. For the corporations' attorneys it is self serving because they get to charge many times any such request just to go forward. Typically, in the end, the corporations get to pay more to the debtor's attorney, their own attorneys, and yet this increased amount is still so insignificant that it does nothing to correct the behavior that caused the violation in the first place. With Citibank and its parent company at a trillion dollars in assets what is the level of damages it would have to pay to get its attentions to even review its systems for complaince more closely? It's truly unimaginable.
Here, however, are the figures that tell it all. The average Fortune 500 CEO makes $11.3 million dollars a year in compensation. In perspective how much money does that represent? For one, it takes a Fortune 500 CEO, whose company has trampled on a debtor's federally protected rights, just 21.71 hours to earn what the average debtor or family grosses in income for entire year. A family in bankruptcy that might earn up to $25 an hour when working is out earned by a CEO who earns this amount every 1.16 minutes.
When the corporation's attorney seeks to delay any settlement on seemingly bogus grounds, those attorneys as well as the debtor's attorneys are typically running up joint fees of $500.00 a hour. Before one believes this is outrageous it is important to know it takes the average CEO only 23.26 minutes to earn this amount.
How many times have we seen corporate attorneys argue that a debtor does not deserve three or four thousand dollars to cover their attorneys' fees and compensate the debtor for his or her rights, which were willfully violated, when the average CEO of the company that violated the rights is earning this amount every 3.1 hours or less.
Money is so plentiful or so worthless that a corporation can afford to pay just one of its thousands and thousands of employees $11.3 million a year, but they cannot apologize for violating federally mandated legal rights by paying an insignificant sum. When will the judges decide to put it in perspective?
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