Populist Anger Made Simple
I wonder why people are so angry about bonuses. Do they hate the rich? Do they want to punish success?Are they eaten up inside with resentment? Do they just not want to admit that some people work harder and are more talented than they are?
“Though the company teetered on the verge of bankruptcy at the time, this past December Philadelphia Media Holdings awarded bonuses to CEO Brian P. Tierney, vice president of finance Richard Thayer and Daily News publisher Mark Frisby. (…)
PMH filed for bankruptcy in February. Toll, of the homebuilding Toll Brothers company, confirmed that the PMH board knew the companyÂ¹s fiscal situation was dire. “The financial condition of the papers was obviously not good,” said Toll. “We knew what was going to happen sooner or later.”
It had earlier been revealed that Tierney received a raise in December, just before Christmas, boosting his pay roughly 40 percent to $850,000. The company initially defended the raise, which was revealed in its bankruptcy filing, by saying that Tierney had taken on extra responsibilities since his initial deal had been struck.
Tierney gave up the raise shortly after it was revealed. Frisby and Thayer simultaneously gave back smaller raises. Now comes news of the bonuses, which were awarded just two months after the company’s unions voted to postpone $25-a-week raises for each of its members at the request of PMH.”
The bonuses were originally reported to be $350,000 for Teirney and $150,000 for the other two, but the numbers are disputed.
Besides the union members postponing their $25/week raises, the Inquirer laid off 71 people in Jan. 2007, laid off 68 people in Feb. 2008, and laid off 35 more people last December. And those are just the layoffs I could find with a quick search. It also failed to pay a whole lot of bills that it was contractually obligated to pay:
“The filing estimated that $4 million in accrued wages, salaries, commissions, bonuses and reimbursable costs remains unpaid. Mr. Bykofsky told The Bulletin that at least the newsroom at the Daily News had been paid, and the checks had cleared. He said that the staff was given paychecks on Thursday, but nobody was told of the bankruptcy filing.
As part of its bankruptcy filing, PMH admitted to its failure to pay out the withholdings from employee paychecks to the proper third parties. The deductions include employee’s shares of health benefits and insurance premiums, 401(k) contributions and union dues.
“Certain deductions that were deducted from regular employees’ earnings may not have been forwarded to the appropriate third-party recipients prior to the petition date,” reads the filing. “The debtors estimate that as of the petition date, $200,000 in deductions may not have been forwarded to the appropriate third-party recipients.”
Further, PMH has also failed to forward employer payroll taxes to the proper authorities, even though they were properly deducted from employee paychecks. PMH estimates that the total number of fees and taxes owed to the authorities does not exceed $550,000.”
So: they stiffed the federal government. They didn’t pay their employees’ 401k contributions and health insurance premiums, though they were deducted from their employees’ paychecks. (We can only hope that none of those employees got sick and were denied care.) Hundreds of people have been laid off in the last two years, and workers have had to take several rounds of cuts. Now the company has filed for bankruptcy. And yet, strange to say, right before they filed for bankruptcy they found a way first to raise their CEO’s salary by nearly 60%, to $850,000, and then to give him a bonus.
Maybe they did this because Mr. Tierney is a prince among men. Then again, maybe not:
“In early 2008, Tierney warned union representatives of “a dire situation” if costs weren’t cut by 10 percent. The papers have slashed more than 400 staff members across all departments since he took over. According to Newspaper Guild representative Bill Ross, Tierney once shook up a management meeting by barking “I will not lose my f*cking house over this!” And Ross says a couple of people emerged from a private meeting with the CEO claiming that he’d spoken to them, in his 12th-floor office, with a baseball bat in his hands. Ross also adds that in January, Tierney took to patrolling the parking garage, watching to see what time employees were arriving to work and asking managers about those who were late. “That’s what I’m getting calls about now,” says Ross. “He’s walking around the parking garage. If he gets hit by a car, it’ll be his own fault.””
Heartwarming, isn’t it? I can’t imagine why anyone is upset.