How Income Inequality Happens

Why would a CEO rush to eliminate both his corporation and his own job? Perhaps because of a lucrative little provision in the contract he signed to become Time Warner’s honcho. It’s a CCC – a “change of control clause.” This is yet another way for CEOs to feather their own nest, for a CCC hands a big golden parachute to the top executive of a corporation that gets sold.

In this case, Robert pockets $80 million. Yes, that’s roughly $1.8 million a day for each of about 45 days he “worked” to sell off the company.

What we have here is a perverse form of incentive pay for corporate chieftains. Rather than rewarding them for outcompeting their rivals, a CCC encourages them to sidle up to their competitors and whisper: “Psssst, wanna buy my corporation?”

Not only did Marcus sell off Time Warner, but his self-serving deal will also sell out untold numbers of its employees who’ll be made “redundant” by the merger. We hear about America’s widening gap in income inequality, but here we can actually see it widen – one rich man gains an extra $80 million, and hundreds of workers lose their income.

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This has been reposted from Jim Hightower’s website.