Carlyle's Rubenstein to Speak at WIF

Secretary of State John Kerry will headline this week's Washington Ideas Forum.  Also on the agenda are Carlyle Group co-founder David Rubenstein and former PEU Steven Rattner of the Quadrangle Group.  Both men settled pension pay to play investigations in New York state.  We'll see if that's one of the ideas shared at this week's event.  

Carlyle Group Goes Big in Fort Lauderdale

The Carlyle Group can store your yacht and provide an oceanfront room in Fort Lauderdale.  It's planning both a new hotel and expanding yacht slip/storage space.

The Real Deal reported:

The Carlyle Group is expanding and upgrading the Lauderdale Marine Center, a 50-acre property on the south bank of the New River near downtown Fort Lauderdale.

Carlyle acquired the marine center in 2015 and subsequently obtained a $136 million mortgage loan secured by the property from Miami Lakes-based BankUnited.

Carlyle once owned BankUnited, courtesy of a sweetheart deal from FDIC Chief Sheila Bair.

South Florida Business Journal reported on Carlyle's new hotel plans in Fort Lauderdale.

The same group that owns the B Ocean Resort in Fort Lauderdale wants to build another hotel on the site.

CRP/InSite Clipper LLC, a joint venture between Weston-based InSite Group and Washington-based private equity firm the Carlyle Group, will take its plan before the city’s Development Review Committee on Sept. 27. It calls for a 12-story, 224-room hotel at 1137 Seabreeze Boulevard/A1A.

Now word yet if BankUnited will finance the deal.  

Yacht owners can get their luxury vessel serviced and crash in extraordinary accommodations under the OneCarlyle banner.  It's a PEU world.

Sequa Corp Failing after a Decade Under PEU Management

Carlyle purchased Sequa Corporation in December 2007 when private equity firms paid premium prices to buy companies.  That debt is coming due.  Bloomberg reported:

All of Sequa’s debt is due next year, according to Standard and Poors, starting with its $1.3 billion term loan in June 2017, followed by $350 million of bonds in December.

At the time of Carlyle's purchase Sequa had $2.19 billion in revenues and $700 million in debt, which Carlyle assumed as part of the $2.7 billion deal.

Sequa had "six businesses with leading positions in niche markets," according to Carlyle's website.  Forbes story on the $2.7 billion buyout said Sequa had seven divisions.  It's down to two today with annual revenues of $1.3 billion.

CNBC reported on Carlyle's buyout:

The Sequa deal, expected to close in the fourth quarter, will be financed through a combination of equity contributed by investment funds affiliated with Carlyle, and external debt financing provided by Lehman Brothers, Citigroup and JP Morgan.  

The Lehman-Carlyle-Sequa link is reflected in the 2012 board bio:

Mr. Adam J. Palmer is a Managing Director of Carlyle and has been the Head of the Global Aerospace and Defense sector team since 2011. Mr. Palmer joined Carlyle in 1996 as a member of the Aerospace, Defense and Government Services sector team. Prior to joining Carlyle, Mr. Palmer was with Lehman Brothers focusing on mergers, acquisitions and financings for defense electronics and information services companies. He currently serves on the board of directors of Wesco Aircraft, RPK Capital Management Group, LLC, Sequa Corporation, Triumph Group, Inc. and Landmark Aviation, and previously served on the board of directors of Standard Aero, Ltd., U.S. Investigations Services, Inc. and Vought Aircraft Industries, Inc. 

Since 2012 Palmer landed board seats at Global Jet Capital, Dynamic Precision Group and Novetta Solutions LLC.

Mr. Palmer could tell us what happened to four or five Sequa businesses since Carlyle bought the company.  The board sold Sequa Automotive Group for $400 million in 2012.  It's not clear what Carlyle did with the proceeds.

Sequa 2007 was a thriving company with numerous divisions in growing niche industries.  After nearly ten years of Carlyle Group ownership it's a stressed shell of its former self.

Carlyle put $1.01 billion of investor money into the 2007 buyout of Sequa, according to fund marketing documents viewed by Bloomberg News.

SEC filings on the buyout show the mix of equity and debt.  Carlyle borrowed $2 05 billion to seal the deal.

Equity Financing - It is expected that up to $900 million of the Merger consideration will be provided through the issuance by Parent of common equity to Carlyle Partners V, L.P. and certain of its affiliates and co-investors. 

Debt Financing - Parent has received a debt commitment letter, dated as of July 8, 2007, from Lehman Brothers Inc., Lehman Commercial Paper Inc., Lehman Commercial Bank, Citigroup Global Markets Inc., JPMorgan Chase Bank, N.A. and JPMorgan Securities Inc. (collectively, the “Banks”), which provides the following, subject to the conditions described below: 

 • a $1.2 billion senior secured first lien term loan facility (the “First Lien Term Loan Facility”); 
 • a $150 million senior secured revolving credit facility (the “Revolving Facility” and together with the First Lien Term Loan Facility, the “Senior Facilities”); and 
 • $700 million aggregate gross proceeds of unsecured senior notes

Moody's shows current debt levels of $1.76 billion

• $1,228 million (outstanding) senior secured term loan due 2017, downgraded to Caa3 (LGD3) from Caa1 (LGD3)
• $175 million senior secured revolver due 2017, downgraded to Caa3 (LGD3) from Caa1 (LGD3)
• $350 million senior unsecured notes due 2017, downgraded to C (LGD5) from Ca (LGD5) 

Carlyle "grew" Sequa down nearly $900 million in annual revenue over a nine year period while retiring/offloading $254 million in debt.   Company wide revenue declined 41%, while debt decreased 12.4%.

I wonder how the family of founder Norman Alexander feels about the deal with Carlyle today.  They might want to give the Brinton's clan a call.

Update 4-5-17:  Carlyle bought back $235 million in Sequa debt for pennies on the dollar.  It still may not be enough for new lenders to rescue Sequa in which case Carlyle's debt holdings would turn into equity.  Sequa's implosion may give a smidgen of satisfaction to the Brinton's family. 

Why Can't Wells Fargo Management Hear?

A handful of Wells Fargo employees reported unethical sales behavior to the company's ethics hotline and Human Resources.  One spoke out in 2011 and another in 2013.  Shortly after sharing their concerns each was fired.  CNN reported:

One former Wells Fargo human resources official even said the bank had a method in place to retaliate against tipsters. He said that Wells Fargo would find ways to fire employees "in retaliation for shining light" on sales issues. It could be as simple as monitoring the employee to find a fault, like showing up a few minutes late on several occasions.

This story is evidence of the shift from human resources to human abuse in most companies.  Executives like to say human resources has become more strategic.  HR no longer is the balance between worker and management.  It directly serves and implements executive wishes, i.e. it maximizes CEO pay.

Wells Fargo's management practices relied on incentives, bribing people to do a good job, and hard targets, where employees were punished for not meeting arbitrary numbers set by management.

Executives created a giant Skinner box where humans were treated like rats.  However, rats don't e-mail the company President, send messages to HR or call the Ethics Line.  Ethical people did.

Executives couldn't hear because that would force them to examine the horrific, dehumanizing system they created to personally enrich themselves.  They couldn't see because their eyes were trained on the layers of executive incentive pay they would receive if the company met or beat its goals.

Image obsessed leaders don't want to hear bad news and view employees raising issues as troublemakers.  Troublemakers need to go and a loud chorus of "La, la, la" must be sung until they are escorted from the premises.  

Wells Fargo is like thousands of other companies where core management underpinnings are greed and vanity. Congressional theater has elected officials acting like they understand, while they work to spread the very same toxicity to your doctor's office.

Rats.  Doctors used to study them.  Now they are one in Medicare's eyes.

Update 11-25-16:  It remains to be seen how doctors, nurses and healthcare folk will lie, cheat or steal to garner the Medicare pellet or avoid a stinging shock.  Like Wells Fargo I expect we'll find out in a few years.

Update 12-10-16:  Wells Fargo partner Prudential suffers from the same inability to hear and address fraud caused by distorting pay for performance.  It's easier to shoot the messengers.

Medicare to Spread Toxic Pay for Performance to Your Doctor's Office

Because your doctor does not have a good job to do Medicare plans to rank/rate/grade physicians and "reward" them for clinical outcomes.    Alfie Kohn, author of Punished by Rewards wrote:

Recall the line of research finding that rewards tend to undermine the very things they’re used to promote. Remove the reward and there’s no longer any desire to continue performing the task. Assuming that we seek to nurture an attraction to the given activity (learning, painting, inventing, etc.), this evaporation of interest is disturbing enough in itself, but it also has the consequence of yielding poorer quality work in many instances, as scores of studies have confirmed.

The number of clinical parameters for each patient are conceptually endless and most of them are not truly under your doctor's control.  They are a product of individual genetics/biology and personal choices made over a lifetime.

Healthcare payment experts would be wise to revisit corporate executive behavior under stock option incentive compensation.  Executives backdated 30% of options to optimize their individual pay, at the expense of shareholders.  Extrinsic reward programs reduce the natural interest in performing a task, but they also cause people to take any method possible to garner the reward.  Ask 5,300 Wells Fargo workers.   

Prior Medicare efforts to reward healthcare organizations utilized a quartile ranking system, where over time "top performers" got a small percentage reward and "poor performers" or nonparticipants a deduction.  From year to year the pay for performance system was not predictive, i.e top performers one year did not stay in that category.  A system that is not predictive is not based on knowledge.  One failure of a theory requires its revision. 

Former Interim Medicare Chief Dr. Don Berwick called pay for performance at the individual level a toxic daisy chain.  That's exactly what Medicare is doing to your physician, if you are lucky enough to have one at the moment.  I'm sure a number of my physician friends will stop taking Medicare patients or simply retire.  Long ago they stopped taking Medicaid patients outside their ER call.

Our healthcare system relies on complexity and hoops seeming designed to deny or postpone needed care.  I predicted PPACA could not deliver on its promises to control healthcare costs.  America does not have a healthcare system.  It has a series of individual parts, with many concerned more about their bottom line than care delivery.

PPACA and the world's sick management culture have made most healthcare jobs difficult and at times distasteful.  They now want to enslave your doctor with financial handcuffs.  Doing something well and doing something for reward (or to avoid punishment) are clearly two different things.  Ask the folks at Wells Fargo. 

Update 11-25-16:  Add complexity to Medicare's convoluted P4P measures which are spreading like an Appalachian wildfire.  Also past performance is not predictive of future performance.  Ranking hospitals on a distribution for reward does not require knowledge. 

Perelman's Financial Games for SG

Bloomberg reported:

Scientific Games Corp. shareholders loved the slot machine and lottery company’s decision to consider an initial public offering of its fast-growing interactive-gaming unit. Bondholders, not so much.

Shares of Scientific Games jumped almost 17 percent after the Las Vegas-based company said on Sept. 7 it would consider joint ventures, an IPO and other options for the business, which makes casino-style games for mobile devices. The bonds fell and remain lower a week after Scientific Games designated the business an unrestricted subsidiary, raising concerns among bondholders about how any proceeds may be used. Scientific Games, 40 percent-owned by New York billionaire Ronald Perelman, had $8.07 billion in long-term debt as of June 30.

Such a decision would need to be made by SG's board of directors, which holds fiduciary responsibility for the company and its many subsidiaries.  Here's a list of board members who will ultimately decide what happens with the interactive gaming unit.

Most of them are Perelman's people or came with the acquisition of WMS Industries and Bally Technology, the two interactive game companies SG acquired in 2013 and 2014.

SG's press release on the WMS deal stated:

WMS was acquired for approximately $1.5 billion in cash. In connection with the merger, Scientific Games entered into a new $2.6 billion credit facility, consisting of a $2.3 billion term loan facility and a $300 million revolving credit facility that was undrawn at closing. The term loan facility was used, in part, to finance the acquisition, to pay off existing indebtedness and to pay fees and expenses relating to the merger and related financing.

Las Vegas Review Journal reported on the Bally deal:

Scientific Games is paying $83.30 per share to acquire all outstanding shares of Bally, valued at $3.3 billion. The lottery company is assuming $1.8 billion in debt.

Scientific Games completed the financing for the buyout earlier this week, pricing out $3.15 billion of debt to be used in the transaction. In October, the company said it raised $2 billion for the merger.

Much of Scientific Games debt was added to buy the firms they may want to spin off. Surely the debt would go with it.  Nope, and that's the bondholders' concern:

The view is different for bondholders, according to Barbara Cappaert, an analyst with KDP Investment Advisors Inc.  Putting the interactive business in an unrestricted subsidiary means that cash may not be available to pay interest or reinvest in the company’s other businesses, she said.  Funds could be used to buy back stock or declare a dividend.

“Given what has happened with other issuers due to the opportunistic use of unrestricted subsidiaries, bondholders are right to be concerned,” said Anthony Canale, head of high-yield research at Covenant Review, a research firm that analyzes credit agreements. He cited Caesars, which sold some of its hotels to an affiliate and then put its most heavily-indebted unit in bankruptcy. 

Bondholders are rightfully concerned they will be subject to a PEU slight of hand move.  SG's board will make any decisions and should be liable for any harm they cause in the service of Ron Perelman's billions in fortune.

SEC Discounts Fine for PEU First Reserve

In May 2016 PEHub reported:

First Reserve agreed to reimburse its investors $12.7 million and pay a $5 million fine to settle a Securities and Exchange Commission investigation  into various fee and expense practices.

By September the amount reimbursed investors fell to $8.3 million and the fine dropped to $3.5 million.  Why the $5.9 million difference?  Only the SEC knows.

First Reserve is an energy focused private equity underwriter (PEU) established in 1983.  Cofounders William Macaulay and John Hill came from Wall Street and the U.S. Government, Office of Management and Budget and Federal Energy Administration.  The pair spoke with Oil and Gas Financial Journal in 2013.  The article stated:

First Reserve and its active controlled companies have invested over $5 billion of equity in platform investments and add-on acquisitions and mergers in 2012.

Ouch.  That $5 billion went to work when oil prices were over $100/barrel.

WSJ ran a piece last summer on First Reserve's struggles with declining energy prices. 

WSJ identified difficulties with two First Reserve affiliates, CHC Group and Midstates Petroleum.  In February 2016 Moody's downgraded the debt of affiliate AFGlobal.  That report stated:

Given the highly levered capital structure, with around $800 million in reported debt, and the significantly lower earnings base, Moody's is concerned about the sustainability of the company's capital structure.

The SEC settlement cited First Reserves cooperation as a factor in fine setting.  It would not surprise me if ability to pay was another.  Former DOJ Chief Eric Holder went out of his way to ensure government fines wouldn't contribute to systemic risk.  I wonder if the SEC adopted a similar frame for First Reserve. 

ZeroHedge took a slightly different stand on the SEC in its piece today on former HFT enforcer Greg Berman landing at  HFT powerhouse Citadel:

And just like that all is well again in the corrupt world, in which the market "regulators" pretends to protect the little guy, when in reality all they only cater to the most criminal with the simple hope of landing a job there one day and getting paid in 1 year what they make in 10 at the SEC or any other government agency.  

Might a reward wait SEC staffers who gave First Reserve a $1.5 million discount? 

Wells Fargo Exec Over Fraudulent Activity Retiring with $125 Million

ZeroHedge reported:

There was a burst of righteous populist anger anger last week, when it emerged that Wells Fargo had engaged in pervasive, "massive" fraud since at least 2011, including opening credit cards secretly without a customer’s consent, creating fake email accounts to sign up customers for online banking services, and forcing customers to accumulate late fees on accounts they never even knew they had. For this criminal conduct, Wells was fined $185 million (including a $100 million penalty from the CFPB, the largest penalty the agency has ever issued). In all, Wells opened 1.5 million bank accounts and "applied" for 565,000 credit cards that were not authorized by their customers. 

As "punishment" Wells Fargo told CNN that it had fired 5,300 employees related to the shady behavior over the last few years. The firings represent about 1% of its workforce and took place over several years.  The fired workers went to far as to create phony PIN numbers and fake email addresses to enroll customers in online banking services, the CFPB said. 

What Wells did not disclose publicly to anyone is that the head of the group responsible for Wells' biggest consumer fraud scandal in years, is quietly leaving the bank with a $125 million bonus. 

Carrie Tolstedt ran the community banking division of the bank, which included its retail banking and credit card divisions, during the entire period in which the customer abuse was alleged, which goes back to 2011. The CFPB said about three quarters of the unauthorized accounts opened by employees of Wells Fargo were bank deposit accounts. Another 565,000 were unauthorized credit card applications. Tolstedt took over the division in 2008, after Wells Fargo merged with Wachovia during the financial crisis..

There are multiple layers to Wells Fargo's management crime.  The first is incentives distort behavior.  Add management imposed hard targets that prioritize bank profits over customer needs and bad behavior goes exponential.  Management learned long ago that 30% of executives cheated by backdating stock options.  They didn't need to lie, cheat or steal to keep their job like many Wells Fargo employees.

Bad management is perpetually surprised when their simplistic methods of motivation, bribing people or firing them, backfire on a widespread basis as people respond to the poor system management created. 

Like the co-worker with body odor bad management never recognizes their offense. 

Wells Fargo’s CEO John Stumpf said Tolstedt had been one of the bank’s most important leaders and “a standard-bearer of our culture” and “a champion for our customers.” 

She is a standard-bearer for greed and driving in fear.  She is a champion for executives who blame the little people for trying to survive in a situation where the employee is damned no matter what.  She is a champion for sticking her executive head in the sand for years while her division assaulted customers financially.   Her retirement pay reflects the bizarre lack of balance and absence of accountability executives get from each other and their corporate board of directors.

Management in our world today is absurd, i.e wildly unreasonable, illogical, or inappropriate.  Carrie Tolsedt is the latest poster child in that regard.  Unfortunately, the system is chock full of absurd corporate executives.  It's the water in which they swim.

Update 9-22-16:  Management was complicit in covering up the predictable bad outcomes from P4P and hard targets. CNN reports they went as far as firing whistleblowers who "tried to put a stop to the bank's illegal tactics only to be met with harsh, prompt and severe retaliation by the bank.  Almost half a dozen workers who spoke with us say they paid dearly for trying to do the right thing: they were fired."  Greed and vanity (image management at all costs) are the basis for today's management practices.

Update 10-20-16:  Distorting pay for performance causes widespread unethical behavior and sends the wrong message to workers that lying, cheating and stealing is OK as long as management's abusive goals are met.

House CPA Votes to Return PEUs to Shadows

The House of Representatives voted 261-145 to relax what little Dodd-Frank did to "regulate" private equity underwriters (PEU).  Bloomberg reported  on passage of H.R. 5424, the “Investment Advisers Modernization Act”:

Among the issues the SEC has found is what’s known as accelerated monitoring fees. Monitoring fees, which private equity firms charge companies they own annually for advisory work, were accelerated into lump-sum payments when a company was sold or taken public ahead of schedule, even when future work wouldn’t be performed. The regulator found that Apollo and Blackstone didn’t adequately disclose the practice to clients.

PEU Report chronicled accelerated management fee collections for the following deals:

Dunkin Donuts - $14 million to The Carlyle Group
CommScope -- $20 million to terminate the Carlyle Group management agreement
PQ Holdings - mentions $ obligation to Carlyle but did not list a specific amount

Economist Sam Wilkin wrote in Wealth Secrets of the 1% (Daily Mail):

...behind almost every great fortune, there lies what he calls a 'wealth secret'. This is a piece of knowledge or a technique that, while not exactly criminal, certainly skirts the customs of the time, and possibly the laws as well. All of them, he says, involve 'some sort of scheme for defeating the forces of market competition'. Many involve legal manoeuvrings or the exercising of political influence. Boldness and fearlessness are a given. Mild psychopathy probably helps, too.

The House of Representatives vote fulfills my assessment/reaction to Wilkin's statement.

America's Red and Blue political teams cater to the .1%, which is largely represented by the PEU class.  Customs skirted, check.  Legal and financial manipulation (tax avoidance, management fees, dividend recaps), check.  Exercising of political influence on a bipartisan basis, check.  Boldness, fearlessness, psychopathy and the complete and total absence of guilt, check. 

Who's overpaying these undisclosed fees?  It could be your pension/retirement plan. 

One might expect a CPA to vote for fee disclosure which has legal accountability.  Not my representative, Congressman Mike Conaway.   His top donor list for this election cycle lists the Private Equity Growth Captial Council. 

PEU Report readers know I jokingly call their lobbying group PECKER (for Private Equity Capital Knowledge Executed Responsibly). 

The House of Representatives, especially my representative, listened to PECKER's memes and voted their wallets.   The Senate is up next.  

Carlyle's Stressed PES: Yergin to Rescue

The Carlyle Group's Philadelphia Energy Solutions is "significantly stressed" according to Bloomberg.

Company pension contributions will be frozen, healthcare benefits will be cut and buyouts will be offered to salaried employees,

Carlyle experienced regular explosions at the Philadelphia refinery, so one has to wonder how postponing maintenance will turn out.

Maintenance planned at the 335,000 barrels-a-day Philadelphia refinery will move to 2017.

BP's Lord John Browne pushed out maintenance and his Texas City refinery exploded in 2005 killing fifteen people.   Lord John partnered with Carlyle on energy via their Riverstone joint venture.  That collaboration ended in 2011.

Carlyle tapped another energy expert, according to today's news:

The Carlyle Group has named Dr. Daniel Yergin as a Senior Adviser. Yergin is the founder of the Cambridge Energy Research Associates, which is now part of IHS Markit. Also, he is a director of the Council on Foreign Relations and is the author of several best-selling books one of which “The Prize: The Epic Quest for Oil Money and Power,” won the Pulitzer Prize.

It's not clear if any workers died under Dr. Yergin's leadership. I'll venture the PEU quest for energy money and power will take down many workers, directly or indirectly.  Pensions frozen, healthcare cut:  It spells pain at the bottom.  The greed and leverage boys.take care of themselves.

Update 10-3-16:  The stressed theme continues for Carlyle's PES

Selling Energy Tax Credits to Alaska Permanent Fund

An Alaskan political blogger contacted me for insight into Governor Walker's advisors pitching unfunded energy tax credits to the Alaska Permanent Fund board.  I wrote:

The energy tax credits are a distressed investment for those who hold them.  The state caused them to be distressed investments by not funding their payment.  Public pensions, sovereign wealth funds and private equity firms like to buy distressed assets, especially those with a clear path to a government treasury.  

What's odd is the courting between the governor who stopped payment (through his advisors)  and the Permanent fund, basically an Alaskan public wealth fund.  If the Permanent Fund buys the lion's share of these tax credits then the governor will have knowledge of the price the PF paid.  That makes it easier for him to fund them at a rate where the PF fund makes a significant profit but less than the tax credits full value.  Governor Walker looks like a winner, making Alaskan citizens money and "saving" on the current obligation on the state's books.  It appears he wants the Permanent fund to get an easy win, possibly helping him recover from ill will for holding the distribution to the public at $1,000 per Alaskan.

I can't find any information on the current value of these tax credits.  Thus they are a Level 2 or Level 3 investment with little to no price discovery.  Let's say the Permanent Fund buys the tax credits for 50 cents on the dollar and the governor later approves their payment at 75 cents on the dollar.  The Permanent Fund would get a 50% profit and the governor could say he struck a deal that  helped every Alaskan while saving nearly $200 million by not paying the full face value of the tax credits. 

If the governor can convince the Permanent Fund to partially bail out the state's $775 million tax credit obligation, what will he try next?  

More research took me to Alaska Dispatch News, whose publisher is married to David Rubenstein, Carlyle Group co-founder.  Carlyle invests Permanent Fund money with the aim of providing big returns.  Mrs. Rubenstein's paper offered:

"Talking to the board could help raise the profile and market value of the tax credits, potentially stoking interest among other sovereign funds or pension funds that are looking for better investments than the low government bond yields currently available, Richards said."

This makes me wonder who currently owns the tax credits and if the strategy is to get those folks a win before the PF.  Have private equity funds already snapped up tax credits at fire sale prices?  Is Richards, as the governor's advisor, helping the PEU boys make their next fortune in Alaska?
 
Everything is so opaque regarding the resale/current value of the tax credits. Both government and PEU firms know how to navigate behind the scenes to their profit/political advantage.  That's likely what's going on here. 

Alaskan Native tax losses helped make David Rubenstein and his clients wealthy:

In 1984, a law was passed allowing native corporations in Alaska—that is, Eskimo owned companies created by Congress to manage native lands—to sell their losses to businesses looking for tax write-offs. The Marriott executives, working with David Rubenstein at Shaw Pittman, discovered the Eskimo clause and vigorously bought the losses to offset gains. The adventure has become known in some quarters as the Great Eskimo Tax Scam.

Has any PEU been vigorously buying Governor Walker's distressed investments?  Have any done so on behalf of the Permanent Fund? 

It's a familiar game.

It's a PEU Labor Day

Workers might have a sinking feeling in their stomach this Labor Day.  We've experienced stagnant pay and declining benefits for over a decade.  We've seen executives profit disproportionately for the work we've done.  Many have watched private equity underwriters (PEU) load our company with debt, mine it for millions in management fees and dividends, then flip it.  The truly unlucky have experienced this multiple times.

Corporate chiefs and boards turned their backs on retirees, sending them to private health exchanges to flounder under complexity and suffer financially as prices soar beyond their new defined benefit.  Executives turned their back on the longstanding commitment to retirees.  Top execs stand to be personally enriched by shunning retirees, as the move shifts costs to the former worker.

Executives set hard targets for productivity and profit, such that managers below them lie, cheat or steal to meet the number and save their job.  Targets are more important than following the law.  Hourly workers are ordered to work "off the clock", a direct violation of labor law.

Fortune reported:

“Chipotle routinely requires hourly-paid restaurant employees to punch out, and then continue working until they are given permission to leave. Turner said she was told to work overtime without pay and tell her subordinates to do so as well so that the restaurant could meet its budget goals.

The company's defense:

“Chipotle has argued this is a few rogue managers who aren’t following policy.

A few rogue managers over 10,000 workers?   This brings to mind the series of BP executives, Lord John Browne and Tony Hayward who blamed underlings (when not claiming ignorance) over the Texas City refinery explosion and the Deepwater Horizon oil rig disaster. 

Rogue describes the state of management in our country today.  Selfish leaders prioritize image over substance, money/profit over people and blind obedience over principled service.  The sickness is widespread in business and government, where both are intertwined in a sick symbiotic relationship.