Skip to main content

Did Someone Ask For the Solution To Corporate Greed?

  • Author:
  • Updated:

We think Ben Stein did but we’ve got water in our ears from this morning’s dip in the pool so it’s hard to say for sure. Anyway, for those who did inquire, Andrew Ross Sorkin and Co. have the answer: go private. Apparently that was the consensus in Switzerland this past week. According to the attendees of a symposium that included people who sound like bigwigs (Pagliuca of Bain Capital, Weinberg of Perella Weinberg, Rosen of Lazard) in Davos on Thursday, private equity will “account for 26 percent or more of the M&A market in five years,” on the heels of this past year’s 20% of M&A’s being represented by private equity. Why?

The ability to pay enormous pay-for-performance packages without an outcry from public shareholders.

According to one pseudonymously named “Buyout King”:

"If one of my C.E.O.’s made $100 million, I’d say that’s great because it means that we probably just made $2 billion.”
What is unacceptable for a public chief executive becomes a powerful incentive in the private sphere.

So there you have it: go private, and shut Ben Stein up.
(There are naysayers, of course, John Thain chiefly among them, who claims “all these ‘going privates’ will soon be ‘going public’ again.” But his word has been, shall we say, fishy, of late).
A Growing Aversion to Ticker Symbols [NYT]