3,800 people lose jobs- CEO still makes millions

In the Jewish faith there are “mitzvahs“- commandments or “good deeds”- and one of the most respected is that of giving people a job. Yep, the Jewish faith says that full employment is great in God’s eyes.

The idea that firing people wholesale is OK- without suffering any consequences- as an acceptable business practice has to stop. If the company is private, and not traded on the stock exchanges, you are free to do what you want- but, the moment you are playing games with other people’s money- there has to be some code of conduct that stops shifting the pain of bad leadership to the troops. You are the CEO- you fire a bunch of people, your pay can’t exceed that of the average pay of the people you fire. End of story.

Oh yes, and shareholders get paid before you do, so, if you are losing money- you don’t make it- just like the small businesses in this country. Kiss your stock and options goodbye if you decide to toss a bunch of people off onto the public’s shoulders with unemployment.

Wells Fargo bank- already bailed out by us, is playing grim reaper to a whole division according to the Dayton Business Journal:

Wells said closing down Wells Fargo Financial will incur pre-tax charges of about $185 million, with $137 million, or 2 cents per share, hitting in the second quarter for employee-severance costs. The remaining charges are expected to be largely reflected in third-quarter results.

Cost savings from closing Wells Fargo Financial are expected to offset these charges in the first year and a half.

Of the 14,000 employees working at Wells Fargo Financial, about 2,800 positions will be cut in the next 60 days and another 1,000 positions will be eliminated in the next 12 months. The remainder of the employees are being reassigned to other Wells Fargo businesses. Wells employs more than 278,000 people.

The move will also create more empty storefronts in strip centers across the nation.

via Wells Fargo to close financial unit, lay off 3,800 – Dayton Business Journal.

And for the record, the Wells Fargo CEO:

Wells Fargo’s CEO, John Stumpf, received compensation worth $21.3 million for last year, according to materials filed with U.S. regulators on Wednesday.

The San Francisco-based bank, fourth-largest in the United States by assets, last year repaid the $25 billion it received from the Troubled Asset Relief Program.

via Pay czar questions Wells Fargo CEO’s compensation | Reuters.

Simple math: divide 21.3 million by 3,800 people- and you get $5,605 each. Throw in the $185 million in charges and divide out- and it’s $54,289 each. Considering that the CEO is paid to be brilliant and lead the company to growth and prosperity- maybe he should try living on a million a year until he figures things out- that’s over twice what the President of the United States makes. Or maybe, he should find another line of work.

After all- he kept his job, despite having to borrow from the government to keep his company going- at a time while he was dropping the hammer on many small businesses who were facing the problems he helped cause.

If employing people is a mitzvah- firing that many people should send you straight to hell. Of course, “Three of the negative commandment fall under the category of Yeihareig ve’al ya’avor, meaning one should [let himself] be killed rather than transgress the prohibition” according to Wikipedia and although I don’t agree that the three cited commandments should make you want to do hari-kari before committal. Firing employees like this in Japan in days of old, the CEO would fall on a sword first. I’m all for that in this case.

At least in a universe where accountability and responsibility are at the forefront.

It’s time we returned the values of accountability and responsibility to public office and to public companies.

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