Two Tales of Abercrombie & Fitch

I just read an interesting article in Time Magazine about the failing CEO of Abercrombie and Fitch, Mike Jeffries, who appears to be trying to kill the goose that lays the golden eggs.

In 2007 the teen stores, with their racy advertising and overpriced crappy clothes was making a profit of $476m. In 2008, this profit dropped to $273m. When the recession hit, they essentially broke even with a profit of around quarter of a million dollars. But in typical CEO style, Mike Jeffries milked the company as much as he could, taking $76m in personal compensation in 2008, just as his failed policies and bad strategies caused same store sales figures to plummet 23%, and stock price to drop 56%. He was also listed as one of highest paid, worst performing CEOs in 2008.

Jeffries not only likes his big fat paychecks, even when he sucks, but he also has a thing for the company jet. His personal travel cost some $1.3m in 2008. Now that the company is hitting some hard times, the board decided to end his love affair with the jet, but in exchange gave him $4m by way of apology.

What I find interesting is the reality that CEOs haven't learned. The recession was, for most of them, just something that happened to the peasants. As the mortgage crisis hit middle America, CEOs like Jeffries were taking multi million dollar bonuses in exchange for curtailing their travel expenses. And in CEO land, if you fuck up, and make bad decisions that cost a company millions of dollars, it doesn't matter. You still make millions of dollars personally. Essentially the price of failure is no different from the price of success. So just fly around on the company jet destroying the company that pays you millions, and then eventually take a golden multi-million dollar handshake and head to the yacht for a vacation.

This kind of corporate stupidity, and greed, is seriously going to bring America to its knees. When you have people completely unconcerned about company profits, putting themselves so far ahead of the employees and the customers, it simply cannot end well.

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After I had read that article I noticed another one from the end of last year that kind of annoyed me.

It seems that some Muslim teen, forced to wear a hijab by her oppressive religion, was turned down for a job at the store allegedly because the hijab is against their dress code (which includes no black clothing and no head covering).

Of course she is suing over the alleged discrimination and will probably end up with some settlement. But this has to be the height of bull shit doesn't it? Abercrombie & Fitch is famous for their dark stores containing massive posters of half naked models (such as the one above). Please explain to me how it is that you can be part of a religion so strict that showing your hair to people is offensive, yet hanging out among half naked sexualized images all day is okay?

I'm all for religious freedom. If people want to worship magic invisible deities, that's up to them (so long as it doesn't hurt others, or involve raping children). But I certainly have a problem with the oppression of women, even if they have been conditioned to 'like' wearing the oppressive garments. We live in a country where most states can fire people for almost any reason, so they should certainly be allowed to make a judgment call when it comes to a hiring decision. Do you really think that Abercrombie would not fire an employee who refused to follow the dress code because of the Flying Spaghetti Monster?

If you believe that your god is offended by women showing parts of their face or hair in public, then you cannot tell me that this same god is going to be okay with you standing around in a dimly lit store surrounded by images of naked people, and young teens in skimpy over priced outfits.

This entire lawsuit seems like an elaborate ruse to me. Conservative Muslim teen tries to get a job at of all places Abercrombie and Fitch. Just happens to have a friend who already works there, who just happens to leak that the only reason she wasn't hired was because of her hijab. Okay, sure.

John Thain: Another Wall Street Scumbag

I want to be a CEO. It seems like the biggest scam going. You can do a horrific job, and then demand the most outrageous salary and bonus package.

The latest Wall Street scumbag to surface is John Thain, the CEO of Merrill Lynch. He worked there about a year or so. During that time he decided to redecorate his office, at a cost of $1.22 million. Ridiculous purchases included:

• A rug: $87,784
• A light fixture: $19,751
• A pair of chairs: $28,091
• An antique commode on legs: $35,000
• Four pairs of curtains: $28,000
• Another rug: $44,000
• A small table: $25,000
• A mirror: $5,000
• A coffee table: $16,000
• A trash can: $1,400
  

But I guess you can't be too mad about a successful CEO surrounding himself with luxury right? After all they work hard and steer the ship. Unfortunately, in this case Merrill Lynch was hemorrhaging money so fast it is hard to imagine that they were not literally throwing $100 bills out of their windows as fast as they could.

In the last three months of 2008, the company lost a staggering $15,310,000,000!

So given the horrific nature of their financial situation, it seems pretty surprising that John Thain decided to push up the bonus dates for his executives, demanding that his people get nice fat bonus checks before they disclosed publicly just what a shit job they had all been doing.

In fact the weird bonus move, which included a $10,000,000 bonus for John Thain himself, is now being investigated by New York Attorney General, who called the allegations 'troubling.'

It is little wonder we are in financial meltdown in this country when such fuckers are in charge of our financial institutions with no regard for anyone but themselves and their rich buddies.

This is why regulations need to be in place to ensure that things like this don't happen. Now I know some people will call me a socialist, but seriously, this current system of doing things is not working.

Jon Stewart on the Daily Show recently mentioned a rather good idea on his show. Instead of this trickle down bullshit where the government gives our tax dollars to corporations who spend the money on themselves and don't lend it, how about giving it to the average Americans? Let them spend the money, put the money in banks, use the money to stimulate the economy.

We've tried it the Republican way, and all it produces are rich douchebags spending $1,400 on a fucking trash can for their $1.2m offices.

I'm not against people being rich or successful. But when you are in charge of a company that is pissing away money at a rate of $125,000,000 a day, you should not be getting a bonus at all. And neither should the executives who helped create this shit storm.

$1.2m for an office redecoration may be a drop in the bucket considering the company losses, but no one NEEDS an office like that, especially when their company is falling apart.

Out of interest John Thain signed on at Merrill Lynch with a financial package that was reported to be worth around $83.8m a year. An astonishing income considering what a piss poor job he did. He recently turned in his resignation.

I will right now formally offer my services to any corporation. I'll do a job that is at least as shit as the one John Thain did, and I will settle for a compensation package of just half what Merrill Lynch paid him. Bargain. Email me today!

Automaker CEOs Ditch The Jets

Last month the CEOs of the big three American automakers went to Washington D.C. to ask the government for billions of dollars in handouts to protect them from bankruptcy (or postpone the inevitable).

Unfortunately their begging for money had a bit of a hollow ring to it, when it was discovered that each man had traveled to D.C. on private corporate jets. When asked if any of them would be willing to fly back on a commercial airline, no one volunteered. After all, who wants to slum it in first class when there's a luxury private jet waiting to take you home?

But having been called out on their bullshit Ford, GM and Chrysler have announced the closure of their fleet of private jets, at least to give the impression that they give a shit.

For the next meeting in Washington each CEO has agreed to make the ultimate sacrifice; they are going to drive in vehicles made by their own factories. That's mighty big of them.

As this fiasco continues to unfold, I just have less and less sympathy for them. Each of these men earn millions of dollars, and none of them can realistically be judged as having done anything approaching a decent job.

When you take a company like GM, and run it into the ground, then have to go to the government to beg for a bail out, it hardly seems reasonable to accept a multi-million dollar remuneration package.

But that's what these guys are doing, all the while churning out useless shit that no one wants to buy.

In my opinion it's time to let nature take its course. The weak die, the strong survive. The American auto makers have buried their heads in the sand, and stood by while foreign companies have led the way. And worse than that, not only have the big three churned out shitty cars for so many years now, they have been dishonest with the American people. They claim to support American workers, yet we've seen GM especially outsourcing jobs to Mexico and Canada in a bid to save money.

Unfortunately, there is no perfect solution to this horrible situation. If the government does nothing, bankruptcy looks inevitable for one or more of the big three. However, if radical changes are not made, this bailout will only postpone the inevitable.

No matter what happens, it seems like time to question the absurd financial packages enjoyed by American CEOs. It's one thing for a successful executive to be rewarded handsomely for the success of his or her company. But when the company falling apart due to bad management, and billions of dollars are needed just to keep the company afloat, it doesn't seem right that the man in charge is being rewarded so extravagantly for their utter failure.