Guaranteeing Failure In Germany

Author:
Publish date:

Before Angela Merkel fully joins Sarkozy's banker bonus crucifixion, she may want to start with the retail sector. In an impressive display of getting something for nothing, Karl-Gerhard Eick, who put in a solid 6 months of work at the helm of insolvent German retailer Arcandor AG, will walk away with a five year guaranteed pay package worth up to 15 million euros (including 5 million in bonuses). But before you think that just anybody can sit in an office, watch the clock for half a year, and wait around until somebody fixes the glitch, Eick proved it takes some real effort to make it into the failure express lane.

During his tenure, Eick failed to find support from the company's main investors, Sal. Oppenheim and heiress Madeleine Schickedanz, to refinance loans. He also couldn't win aid from the German government after years of declining department-store sales. The government rejected two applications for help by Arcandor in June, saying it wanted the owners to stump up more funds.

Close to 3 months after overseeing the company's insolvency filing, Eick left his adoring employees with some comforting words for their future: "I am not greedy, but I am not stupid, either". That distinction is left to the private bank that provided the pay package and probably the thousands of soon to be unemployed workers who thought somebody securing a 5-year guarantee might be able to save their jobs.
Arcandor Chief Eick Leaves, Armed With Pay Guarantee [Bloomberg]

Related

Germany Looks At Its Banks

For all their saber-rattling and bold talk about a final solution to the problem of global financial risk, the Germans haven't done a hell of lot to rein in their banks. There is, for instance, no GroƟdeutschesvolckerregierung. At least, not yet.