7 CEOs Who Should Return Their Bonuses
America is experiencing a renaissance in workers’ rights — from campaigns pushing to increase the minimum wage to increasing calls to reduce income inequality. Corporate executives have come under the spotlight for bringing home extremely large paychecks while at the same time undermining their workforce and partnering with lobbyists to expand corporate power. A number of Supreme Court rulings have come down recently in favor of expanding corporate interests, leading to consumer and citizen outrage. All the while, CEOs need to keep an eye on their own businesses and take the heat when mistakes are made.
The Internet has made it easier for consumers to gain access to information, making it harder for companies to sweep things under the rug like they were able to for many decades. This has led to higher turnover in the executive pool, meaning executives who are at the helm are willing to take higher risks than they might have otherwise. The result is a world in which CEOs become the sacrificial lambs for their company’s mistakes or negligence, as an act of acknowledging public outcry. In short, it can be tough to be a CEO.
Previously, we took a look at a handful of CEOs that were relieved of their command following some sort of colossal screw-up, whether it was their fault or not. Now, we’re taking a look at seven CEOs who should be giving their bonuses back. While what has happened under their watch may not be a fireable offense, their actions have clearly not warranted any extra compensation.
Here are seven CEOs who should return their bonus checks immediately.
1. Sony CEO Kaz Hirai
We start the list off with an example of a CEO who actually did return his bonus check – Sony (NYSE:SNE) CEO Kaz Hirai. Hirai and 40 of his top executives will return roughly $10 million in bonuses they received, following another net loss for Sony’s electronics division. Hirai has failed to turn the division back into a profit center, despite seeing his television and computer products being spin off into separate brands.
Once Sony’s major profit center, the electronics division has suffered in recent years. Hirai’s plan to return his bonus is an acknowledgement of his failure to pull through on his end, and is most likely a move an American CEO would never make.
2. Hobby Lobby CEO David Green
Hobby Lobby has been in the news quite a bit over the past several months, mostly thanks to its lawsuit that reached the Supreme Court involving the Affordable Care Act and concerns about religious freedom. CEO David Green is the founder of the company, and apparently thinks its appropriate to instill his personal feelings about emergency contraception onto all of his employees.
Green is a devout Christian, and runs his company based on his Christian ideals and values. However, when the Affordable Care Act was signed into law, it required that all for-profit corporations abide by their rules to supply employees with contraception. Green, using his corporation as a vessel, has crusaded against this part of the law since the beginning. Instead of using his time and resources to improve his business or take better care of his employees, he has made it his mission to make sure they all are forced to live by the values he approves of.
While there is nothing wrong with having your own personal beliefs, Green has used his position as CEO to alienate his employees and potentially use the Supreme Court to make a highly questionable ruling if things come down in Green’s favor. Employees of Hobby Lobby should be upset that Green seems more content playing hardball on Capitol Hill than running his company.
3. AIG CEO Bob Benmosche
Bob Benmosche, acting CEO of AIG (NYSE:AIG), makes an easy entry on our list of CEOs who should return their bonuses. In fact, bonuses are exactly the reason Benmosche has found his way into the news. It all goes back to the peak of the financial crisis, in which AIG was a major player. During that time, AIG was the recipient of $173.3 billion in bailout funds from the federal government. The company then took $450 million of those funds and handed it out to executives in the form of bonuses. Of course, the obvious question is why would a company that needed $173 billion in bailout funds think it ought to reward its management team?
While Benmosche was not CEO at that time, he did have the nerve to tell The Wall Street Journal that uproar over the bonuses “was intended to stir public anger, to get everybody out there with their pitch forks and their hangman nooses, and all that — sort of like what we did in the Deep South [decades ago]. And I think it was just as bad and just as wrong.”
Comparing racial repression to getting handed millions on the backs of the taxpayers was probably a massive lapse in judgment on Benmosche part. Or, more likely, he actually feels that way. Either way, AIG shareholders and employees should hope Benmosche hands his bonus checks back after remarks like that.
4. Bank of America CEO Brian Moynihan
Brian Moynihan, CEO of Bank of America (NYSE:BAC), took on quite a challenge when he assumed the mantle of one of the most hated companies in the country. Bank of America, much like AIG, played a big role in the 2008 financial crisis, and have since only gone on to further alienate customers and make mindblowing blunders, like in the cases where the company has essentially stolen people’s houses.
Moynihan himself had almost been fired in 2009, according to former CEO Ken Lewis, yet somehow managed to stay on board and has since found himself in the pilot’s chair. Since taking over, Moynihan has presided over mass layoffs across the country, all the while seeing a huge raise for himself in 2011. Stories like this don’t help the bank’s reputation among consumers. For the sake of Bank of America’s reputation, taking a break from self-congratulatory bonus checks would probably be in the company’s best interest.
5. Boeing CEO W. James McNerney, Jr.
Boeing (NYSE:BA) was once the proud and mighty aerospace kings, supplying skies with commercial and military aircraft while keeping many people gainfully employed at its many production facilities around the country. While they remain one of the top aircraft manufacturers in the world, under the watch of CEO W. James McNerney Jr. the company’s profile has taken a nosedive as of late.
Many of McNerney Jr.’s decisions have been questioned by the public and shareholders alike, including his decision to shift engineering jobs away from the Pacific Northwest, a hotbed of engineering talent, to other plants around the U.S. McNerney Jr. also implemented a pension freeze for more than 68,000 employees, while his own plan remains untouched. While McNerney Jr. has been freezing pensions and laying off perhaps his most talented employees, he’s seen his own compensation skyrocket.
McNerney Jr. should be giving his bonus check back as a testament to how he has treated his company and employees over recent years. In the words of Seattle Weekly, “Dude is just plain terrible. For the conscienceless negotiation tactics of the company he leads, he’s the rightful recipient of Seattle Weekly’s very first “Dick-Move of the Week” award. He’s certainly earned it — unlike that pension or annual compensation package.”
6. Best Buy CEO Hubert Joly
Fewer companies have had a rougher time recently than electronics-retailer Best Buy (NYSE:BBY). The company has been labeled as one that is destined for liquidation, especially after watching competitors like Circuit City bite the dust. CEO Hubert Joly has actually been able to inspire confidence in many company stakeholders, but faces a tough uphill battle to keep the company alive.
Conversely, while there have been signs of a turnaround under Joly’s watch, stocks took a tumble at the beginning of the year thanks to disappointing holiday sales figures. Sales have dropped and stocks as well, but there is still a lot of hope for Best Buy’s future. Joly doesn’t seem content to watch the ship sink beneath him, and has mounted an admirable attempt to keep rebuilding the company to stay competitive with the likes of Amazon (NASDAQ:AMZN) and Wal-Mart (NYSE:WMT).
So why should Joly return any bonus checks he’s receiving? The fact of the matter is that he’s still at the helm of a company that is in trouble. Joly is steering Best Buy toward more a more promising future, and if or when he can return the company to financial stability and growth should he be due for a well-earned bonus.
7. GM CEO Mary Barra
Mary Barra has only been freshly minted as the CEO of General Motors (NYSE:GM), but her first few months have been marred by problems. Most notably and already covered extensively is the GM recall of 2.6 million vehicles due to a faulty ignition switch. There have also been a smattering of other recalls, but the ignition switch issue is by far the most high profile. It led directly to several deaths that could have easily been prevented by GM spending less than a dollar per vehicle.
Barra walked into the middle of a maelstrom, and now has to answer for many of GM’s past mistakes, although she may not be directly responsible for them. In an act of good faith towards consumers who probably have had their faith in America’s largest auto maker shaken, foregoing any bonuses would be in her best interest. Barra will have plenty of opportunities to earn her bonuses if she can successfully turn GM around and restore customer’s faith in the company. But for now, she is best off leaving her bonus money in the company account, where it can be used to settle with the families of those killed due to GM’s negligence.