CARRIE TOLSTEDT IS WHAT’S WRONG WITH AMERICA

Dragline: Why you got to go and say fifty eggs for? Why not thirty-five or thirty-nine?

Luke: I thought it was a nice round number.

Let’s face it, at the heart of all the animosity over this year’s presidential election, lies income inequality.  Whether one is a Trump supporter or a Bernie supporter, this is the issue that is turning these fringe politicians into mainstream ones. Immigration, taxes, and trade (healthcare and education too) are all a function of too many people believing (correctly) that they are getting a smaller and smaller piece of the pie.

Nevertheless while politicians and Wall Street seem to shoulder the bulk of the blame for income inequality, I argue that the ship has already sailed on these culprits, and that in 2016 it is the executive compensation at publicly traded corporations in America that is now the overwhelming cause of this problem.

There is probably no better example of how bad this issue has become, than by focusing on Carrie Tolstedt, the recently ‘retired’ Wells Fargo executive in charge of consumer banking, the division where her employees opened more than two million unauthorized accounts.  Three things revealed by this episode stand out in regards to why America’s biggest problem emanates from its publicly traded corporations.

First and foremost, according to Fortune, Tolstedt “is leaving the giant bank with an enormous pay day—$124.6 million.”  That is a massive number, and taking my cue from Cool Hand Luke, I have to ask “Why couldn’t this have been $50 million, or $75 million?” Would those huge numbers not have been enough to motivate Ms. Tolstedt over the years?  What was the board and the CEO thinking in giving such enormous amounts of the shareholders money to this individual? Continue reading