Greed is Fucking BAD; The SICKNESS in North America

Ever since the movie Wall Street, where the infamous Gordon Gecko character uttered the words "greed is good" and then rationalized that phrase in the most self-serving way possible, many North Americans have come to accept it as a truism of sorts. That's bullshit! Greed is a disease, a sickness, and you do not have to be religious to understand that the love of money is the root of all evil. Note that it is not money itself (money is a tool that can be used for good or bad or indifference) that is evil, but rather the love of money.

When the tech bubble burst at the turn of the century everyone focused on the "bubble" and the stock price multiples and few noticed the ridiculous compensation levels that sunk many companies before they got started. When I used to work at Altamira with brilliant fund managers like Frank Mersch, Norm Lamarche and Sue Coleman, one of the acid tests regarding potential investments was the "car check". If we went out to visit a company that we were considering investing in, the managers and analysts would try and park in or near to the employee parking to see what kind of vehicles management were driving. If the President and his son were both driving Mazerati's, then we were left wondering if there would be much profits left for shareholders. If key management personnel were driving Chevys and Fords, then it was realistic to expect that there may someday be healthy dividends for shareholders.

The "greed is good" mentality fosters a sense of entitlement at the top that totally belittles the rank and file that actually create and produce the goods and services offered for sale. The idea that most of the shareholder value comes from the top is asinine, as most great companies (eg. Dell, Microsoft+++) are sales and service organizations through and through. I am not saying all of this money should go to the workers, but let's consider an alternate formula. If a company was paying 50% of corporate profits out in bonuses and options for the top 1% of employees, it may be more efficient for the firm and the economy if companies distributed that more widely.

Current Greed Mentality (After-tax Profits)

50% Executive pay, bonuses, options and perks
30% re-investment in company
10% employees
10% retained earnings

Proposed Active Shareholder Formula (After-tax Profits)

20% executive pay, bonuses, perks, options
40% re-investment in company
20% employees
20% retained earnings

I'm no accountant but I know the second formula makes for a much healthier company, positioned to grow profitably for the longterm. These things are difficult to legislate, so it is crucial that institutional investors get active and punish companies for overdoing compensation at the top.

Anybody have any comments or ideas about this?