Porsche Bonuses to Employees Pale what was paid to CEO

Catching up on October news, I re-read an article I put aside about Porsche paying out bonuses to employees for 2009. The headline in the FT read "Porsche pays out bonuses to its workers" Nice huh? Well one quickly finds out the total bonus was Eur1,100 per each of it's 12,500 employees or Eur14 Million. The single "golden parachute" paid to it's exiting CEO, Wendelin Wiedeking, who left the company near bankruptcy, was Eur50 Million. 50 Million for one guy who nearly put 12,500 people out of work with his reckless behavior and we celebrate some bonus going to employees?

I have come to realize how flatly unjust the economic system we have is. When the CEO clubs of the world are raking $40 to $400 for every $1 paid to rank and file workers, the math really adds up. I would presume that many workers in many industries would have fully funded pensions and fully funded insurance if so much cash were not being stolen by the guys who run the companies that employ them. Theft is the only way to describe the outlandish pay packages awarded to each other. To argue somehow nobody would be willing to do these jobs without the pay is completely BS. People ran companies 30 years ago when the discrepancy was only a quarter of what it is today.

I also am nagged by the fact that I read every week the stock sales of "insiders" of major corporations in the US. In one recent listing of filings, the top 20 companies where insiders sold stock, the dollar value was $270 Million dollars worth. There were 64 people in this batch meaning the average amount raised by the 64 executives was about $4.2 Million each. These guys still hold substantial amounts of stock in their companies. This was just a recent filing of insider sales. This kind of thing happens all the time. Executives get "awarded" paper that can be sold for millions of dollars later. For what?

According to an article published in August 2009 by Emmanuel Saez "The top 1 percent incomes captured half of the overall economic growth over the period 1993-2007". This "income" is real income, real money in the banks of these folks. We talk about "money" being "lost" in the stock market etc. Well, the stock market "values" stocks at what people are willing to pay for them. This does not mean that at any one time the market is really worth the sum of all the stocks times what people are willing to pay because that much money does not "exist" at any one time to buy all the stock if everyone who held the stock wanted to sell. Witness what happened to the $600 Trillion derivative markets when nobody wanted to buy all of the sudden. Who has that much money to buy all that paper? Nobody.

So the "suckers" who loose money in the stock market paid hard cold cash for paper that became worth considerably less. But on the other end there are folks who are being "given" this same paper and being allowed to eventually "sell" it for cold hard cash to any willing sucker who will buy it. On any given day in the stock market a few thousand shares of any one company being sold are not even noticed but over time the cumulative effects of all this paper being "sold" by "insiders" adds up to real money, Tens of Billions of Dollars a year of real money going from the accounts of those who "bought" the stock (401k's, State Pensions etc.) to the accounts of those who "sold" it without ever having to "buy" it in the first place (or can buy it at a fraction of what they sold it for due to options valuations).

So 50% of the money "earned" in the US goes to 10% of it's people and all 12,500 workers combined at Porsche got 28% of the Bonus of one man. That is something to celebrate, yea they got bonuses! Let's party.

It is easy to see how completely out of wack our economic system has become and how absolutely unequal the US has become. We are in the same league as Brazil, Zambia, Venezuela, Uganda, Swaziland, Rwanda, Philippines, Mozambique, Guatemala... You get the picture.