Greed by Any Other Name

Money Bundle

There is a great article in the Wall Street Journal today [Note: I believe this link is subscription-only].

The title of the article says it all: “When $70 Million is Not Enough”. It is about how a star at Goldman Sachs, aptly named Mark McGoldrick (nicknamed “Goldfinger”), quit because he felt his $70 Million in compensation in 2006 was inadequate.

I’m quite sure that the vast majority of the world is just flabbergasted by the hubris of Mr. McGoldrick. I’m sure the indignation is quite ripe. After all, even the biggest lottery winners don’t even dream of getting this much money over their lifetime, let alone as one year’s compensation. And they marvel at the fact that the island of Saint Kitts is overwhelmed by the damage done yesterday by Hurricane Dean, estimated to be over $50 Million — an amount Mr. McGoldrick could cover and still have tens of millions to spare.

But I’m not surprised. Because I’ve seen worse.

But I’m not surprised. Because I’ve seen worse.

Yes, really, I’ve seen worse. You see, I was in charge of compensation at Microsoft at the zenith of the dot-com boom. If you want to get a brain freeze, if you want to see warped values, and if you want to see upset people, you need to see extremely competitive people discuss their compensation.

I had senior people in my office griping about net worths in the magnitude of the GDPs of small countries. They pointed to others who they deemed less worthy, and complained that just being ahead of them was not enough. No, they needed to wipe the floors with them.

I had more than one executive who was on their way out the door demand, and get, millions in compensation — for what I was not sure. They stomped and moaned and complained like children until someone, anyone, would grant them what they wanted. And then they left.

I had one case where an executive threatened to start up a business that potentially would cause one small part of the company some grief. He made numerous vague, disguised threats until he was granted $30 Million in stock options. He promptly left, and started the business anyway. And now his biggest customer is Microsoft.

So, Mr. McGoldrick is disgusting, and clearly demonstrates that all that is wrong with Wall Street today. But he’s just an amateur. If he wants to really know how it’s done, perhaps he should drop me a line.

2 Replies to “Greed by Any Other Name”

  1. I know it’s a gross generalization to think that all high-end execs think the way Mr. McGoldrick does, and that for every one of him there are several who don’t…but it’s still mind-boggling.

    And what the hell ever happened to the idea of working to make things better? To improve the lives of your fellow citizens and you weren’t in it for the money only? I know there are many people who believe in altruism (and your former boss is a great example), but still, Mr. McGoldrick should be ashamed.

    Actually, the person who should be more ashamed is the next guy who hires him.

  2. Compensation, house size, it’s all a matter of competition with the Others or a validation of self-worth. Keeping up with the Jones’ isn’t an imaginary truism. One of the reasons so many in the American middle class are on the verge of going broke is they’ve succumbed to the phenomenon whereby a man with a 2500 sq. ft. house suddenly find he must have a 10,000 sq.ft. one, one with an indoor pool and an “Extra” room, when he learns that Mr. Jones has built house of 8500 sq. ft. Banks have been willing to assist him in his venture. The piper is now presenting the bill.

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