Stop corporate execs from cashing out before bankruptcy

Earlier this month, we learned that the recently bankrupt VICE is not paying bills and has been unable to pay laid-off staff and freelancers for months. But guess what? It had no problem mustering the money to pay execs moments before going belly up. Yeah, that’s right. A day after slashing more than 100 jobs and going bankrupt in May, Vice doled out more than $1 million in performance-related bonuses to its C-suite, which already commanded salaries between 6 and $800,000 a year. 

We’re seeing this seemingly self-dealing type of behavior from a number of companies nowadays, where those in positions of power go for a cash grab of some kind, knowing that the organization is going under. Earlier this year, it was Silicon Valley Bank, where the CEO, who made roughly $9.9 million last year, unloaded his stock just weeks before the tech-heavy bank went bust. The CEO of Signature Bank did the exact same thing. These people were in positions to know that their companies were not going to survive. And what did they do? They used that knowledge to financially benefit before the news broke.

In 2021, the Security and Exchange Commission — yeah, the SEC — well, it said it was launching an effort really to close this kind of loophole, to crack down on this insider trading type of behavior, as it concerns opportunistic stock sales before bad news hits. 

But so much more must be done. In addition to beefing up SEC laws — and the government must implement measures that authorize the feds to hold executives, and any type of leadership civilly, and I would also argue criminally, accountable for taking these big paydays and bonuses, knowing that they’re on the verge of bankruptcy. It’s a form of fraud as far as I’m concerned. These leaders, they took oaths to do what was in the company’s best interest — to lead, not to fill their coffers before D-Day. Unionizing will not stop this form of corporate greed. VICE had a union. Their execs easily pocketed what little money was left in the 24 hours after that mass round of layoffs. We need far more, we need laws, laws that regard such behavior as a type of self-dealing in the corporate context. There has to be something out there so that they can empower employees and shareholders to sue executives in their personal capacity for their pre-perilous payday. 

Why should they get to use their position and knowledge to come up while the employees are wondering whether they can make their rent, pay their mortgage, feed their families due to layoffs, cutbacks and all else, after these executives ran it to the ground? There has to be a private right of action. We the people who invest our time, our energy, blood, sweat, vision into an organization should not be asked out because the execs opt to CYA. These ideas of regulation and criminalization are not crazy. And I know I’m not asking for too much. To the extent that you may think that your position is that these corporations, their leaders should go unscathed and be able to pocket cash, ask yourself why is that? Why is it that we think that certain people at organizations should be able to use their knowledge to make themselves wealthy while everyone else suffers and struggles.

As far as I’m concerned, that’s kind of that whole capitalism-corporatism thing. And that’s kind of the reason why we’re in this not so great situation as a society where we have poverty, we have class divide, we have all sorts of problems. We need to take a different look at how our life, our world, our government is structured, and actually implement some changes that would actually help us all as one people come up and rise, as opposed to allowing those execs to get their comeups off of the back of the people. But then again, maybe those are just my thoughts. In the meantime, I am not going to be investing in any companies that have no parameters put in place to ensure that their leaders don’t get big paydays at the end of the day, because damn sure, no, it ain’t right.