A Telling Anecdote on CEO Greed
Today’s excellent Globe Report on Business storyÂ on Potash Corp CEO William Doyle
scarcely requires additional commentary.Â But here goes –
Apparently, his stock options are now worth $600 Million, up from $7 Million at the end of 2003.Â This huge windfall reflects soaring potash prices, up from $100 to $600 per tonne over more or less the same period. To state the obvious, Mr. Doyle cannot have played much if any role in the run-up in global demand for potash which inflated his options in such a spectacular fashion, but he is cashing in big time nonetheless.
Why should shareholders accept compensation structures which allow a small elite of corporate executive insiders to capture huge windfalls from rising resource rents? Why, as Jim Stanford asks today, should we allow shareholders and insiders to collect even higher windfall resource rents via deep corporate tax cuts? Why, as a society, should we tolerate the huge, huge inequalities which result from allowing the very, very few to profit so handsomely, with so little apparent additional effort?
Its especially egregious that Mr. Doyle lives in Chicago so will be unlikely to pay Canadian income tax on his Made in Canada resource rents, and that the head of Potash Corp’s compensation committee sees fit to comment thatÂ Mr. Doyle should be commended for boldly stepping into the spotlight rather than taking the easy way out by exercising his options sooner and leaving cash on the table.