A quick update on avarice in America and beyond
Why do corporations borrow? To invest in innovation, the textbooks inform us. In real corporate life today, the latest stats suggest, corporations borrow to feather executive nests. In 2013, Wall Street watchdog Pam Martens notes, corporations in the United States borrowed $782.5 billion. They also bought back $754.8 billion worth of their own shares of stock. All told, U.S. corporations have spent $4.14 trillion on “buybacks” over the past eight years. These “buybacks” have one and only one purpose: to raise the value of corporate shares. CEOs love buybacks: Their “performance pay” typically rises as their shares gain in value. CEOs in other nations apparently haven’t caught on yet to buyback magic. The top execs of global corporations based in India, one analysis last week observed, only make one-tenth of what their U.S. counterparts rake in . . .
Plenty of corporate execs run outfits that profit off the misery at the bottom of America’s economic ladder. But count Family Dollar CEO Howard Levine among the few execs who fail at that profiting and still lavishly fill their own pockets. Dollar-store retail, overall, has soared since 2008 as the ranks of Americans in poverty have jumped by almost 40 percent. But management blunders have kept Family Dollar the only dollar-store “Big Three” corporation with drooping sales over the past year. Last week, Dollar Tree — a top Family Dollar rival — announced an agreement to buy Levine’s troubled retail empire for a price well above over Family Dollar’s share value. Levine will report to Dollar Tree’s CEO once the deal finalizes, if he chooses to keep working. He may not. His likely take-home off Family Dollar’s sale: $130 million . . .
America’s top 1 percenters, Too Much related last week, are spending record thousands to assure their kids spots in the nation’s most sumptuous summer camps. Not included in those thousands: the big bucks wealthy parents are now spending to pack their kids up for summer camp. Barbara Reich of New York’s Resourceful Consultants charges $250 an hour to fill trunks with “delicate touches like French-milled soaps and scented candles.” A typical job runs four hours. Two years ago, Reich had one order for her services, last year five. This year she had 10 orders before Memorial Day. Her fellow packer Dayna Brandoff of Chaos Theory says well-heeled parents want the trunks she packs to help “recreate their child’s bedroom so they can feel completely at ease in their air-conditioned bunks.”