December 2, 2014 by Chris Kite
It’s become pretty much standard. Corporate executives receive huge pay but are not actually held accountable for actions. Unless those actions are perceived as positive. The standard argument says that corporate executives bring talent and leadership and are very valuable. Thus they receive huge pay. Sadly, corporate America has largely focused on short term results. Raise the stock price at all costs. Make poor short term based decisions rather than managing for the long term.
Sometimes those actions go way beyond just damaging the corporation. In the case of Massey Energy, the allegations are that these short term decisions went way beyond stupid. This court case is trying to prove that the decisions were literally criminal. Resulting in the deaths of miners.
I have no problem with corporate executives getting enormous pay as long as that compensation is tied to performance. I believe it should be long term performance, not the daily stock price. But I also strongly believe that corporate executives need to be held accountable for their actions. If they break laws, endanger employees, or destroy the environment, as allegedly happened in the case of Massey Energy, then they need to be charged and tried.
We can hope that this case will send a message and change behavior. Time will tell. I’m not terribly optimistic that Blankenship will be found guilty or serve prison time. After all, he can afford the best possible legal defense, and he and his corporate backers essentially own the system. But perhaps this is an opportunity to prove that sometimes our justice system does get it right.