WHY SHOULD ANYONE TRUST CORPORATIONS?
It's been years since a Sabia irked me with controversial views but these latest musings by Michael against those of us silly enough to invest in stocks and trust that our views count should draw a broadside of contempt.
His mother, Laura, the famous feminist, Tory and Sun columnist, used to give me ulcers as her editor at the Toronto Sun when she was just getting warmed up at the keyboard. God bless her! She was great in an argument about anything, whether she knew about the subject or not.
Since we also had mutual friends and met at parties, I could sympathize with her husband, the senior Michael, who was a doctor in St. Catharines where his wife started as a councillor, and said mornings at the hospital were quite interesting since his colleagues daily came to work raving about the latest, ahem, nonsense, from his wife.
Since Laura never rejected a microphone or a request for a comment, the Sabia family was used to living in the eye of verbal storms. And two of the children, Maureen, who I always regarded as a woman who fancied herself a legal greyhound in a world of beagles, and Michael, now the head of Canada's second largest pension fund dominating the affairs of Quebec, were no strangers to spinning hurricanes.
Canada and other big economies can't continue to treat companies like commodities that can be bought and sold at a whim, says Michael as he continues his crusade that there has to be a new market model, one that doesn't have the short-term focus of money-making and is aimed more at long-term investment and company building.
So let's see now. Let's take BCE, a company that Michael used to know a lot about since it certainly has soared since he left as boss. It's the traditional widows-and-orphans stock, where humble folk depend on dividends and maybe even capital appreciation to buy the necessities of life. So Michael says Bell should concentrate not on good quarterly returns but work more towards building a stronger company.
Of course that makes sense, unless you are a widow or orphan who would just as soon have the stock go up, which it has been doing, and also pay a great dividend, which it also has been doing, one of the reasons it's so often recommended in business coverage.
Articles covering this latest round in Sabia's campaign pointed out that other business leaders, even the Supreme Court, have said that shareholders should not always get the last word, for example, on a takeover bid. Then there's the securities watchdog in Quebec saying that corporate directors should be able to decide what's in the best interest of a company when there's a hostile attempt to buy it without the intervention of authorities.
I just don't understand this crap.
We have had billion dollar scandals where the U.S. and Canadian governments have had to save giant financial organizations and banks from ruin when they really didn't know or care what they were doing, or who they were robbing, as long as the execs got obscene bonuses.
We have had huge platinum handshakes and payoffs, for example with BlackBerry, where companies frantically treading water get rid of the people that started the drowning.
We have jerks like Conrad Black still swanning around in society as if he wasn't a jailed cheat, as if it was okay to live like a bloated baron as long as you impressed with preening use of big words.
And now these corporate leaders really expect us to let them operate as if the shareholders who have bought a bit of the company have no rights. They pretend that the overpaid execs can be trusted to do the right thing.
Horseshit!
The latest word out of Wall Street and the TSX is that the licentious days of obscene expense accounts, bigger bonuses, dwarf tossing, and sticking suckers with bogus stocks are now just the stuff of novels and movies nominated for the Academy Award.
Elite university grads no longer drool at being stockbrokers. They still are paid well but it's 100-hour weeks, or so they say, so now the curdled cream of the graduation crop head for the dream streets in Silicon Valley, which now has its own problems with San Francisco saying it's ruining the local economy.
What the Sabias of the world have to realize is that CEOs these days have all the aroma of politicians, and anyone who buys stocks still has a healthy distrust of stock markets, and anyone who really trusts bankers probably are so dumb that they think all those bank charges are legit.
Except you make only a tad more money on your savings in the bank than you do if it's stuffed in your mattress, but it's safer in your mattress.
Sabia can wrap his rhetoric in MBA BS and pretend that it would lead to a healthier economy, but the blunt fact is that ordinary Joes and Janes invest in companies listed on the stock markets because they would like the stock to go up and it would be nice if it paid a dividend too.
If you expect stockholders to wait five years or so for even one dollar, and not judge a company every quarter, then you really view them as a flock of sheep to be fleeced without securities watchdogs interfering. Yeah, some watchdogs, they have a lousy bark and no bite, and the stories of how they didn't act against the Ponzi schemers and pyramid builders read like anecdotes from Hell.
Isn't it sad that we have to wait for years for movies like The Wolf Of Wall Street and investigative shows like 60 Minute to tell us how they tried to take us five years or so ago. And now Sabia wants to slow down the reporting so CEOs and their handpicked boards can have more years in order to play with the books.
For shame!
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