If you’re a rank-and-file employee and you
don’t produce, you’re handed a pink slip. But if you’re a
top executive who doesn’t produce, you get a golden handshake.
Wall Street giant Morgan Stanley recently gave us yet
another demonstration of this inequity and hypocrisy that goes to the core
of modern corporate ethics. In late July, the firm’s acting president
announced the firing of a thousand brokers from its retail division,
sternly declaring: “We must constantly review the performance of
individuals in the retail group and identify those who are not up to our
standards.”
Fine. Nothing wrong with accountability. But contrast
this businesslike pruning of weak performers on the company’s front
lines with the pampering of two weak performers at the top of the corporate
hierarchy. Philip Purcell, the firm’s CEO who presided over a 50
percent decline in Morgan Stanley’s stock value in the past five
years, was finally dismissed — also in July — for his
inadequate performance. But Purcell was not curtly shown the door, as the
thousand brokers were — his descent from the top was eased by an exit
package that included a bonus, stock payments, cash, pension, health care
for life, and other perks worth $113 million!
Then came Stephen Crawford, who had been elevated by
Purcell to the lofty rank of co-president of Morgan Stanley — a post
he held for only three months. Yet, unlike the rank-and-filers,
Crawford’s fall from the heights was cushioned by a soft pile of
cash. He walked away with $32 million. A Morgan Stanley board member who
helped orchestrate the pampering of Crawford dismissed critics of the sweet
deal, saying: “I don’t think that Steve’s compensation is
out of the norm.”
Exactly. The ethical norm is now so perverted that
the outrageous has become commonplace.
This article appears in Aug 18-24, 2005.
