Is there anything good at all about Megacorp?
I think you would agree that I have painted a bleak picture of Megacorp. It is fuelled by greed through obscene executive compensation. This involves fleecing shareholders and exploiting employees to the point of burning them out then spitting them out.
Through the business schools of management it has created and holds in its pockets it has created an ideology that promotes, legitimizes, and excuses its abuses.
In fact, corporate funding chokes these “schools of management” from any true degree of academic impartiality to the extent that MBA professors and graduates are the pimps and hookers for Megacorp. If Trump has created the term “fake news,” these schools have created “fake economics.”
In the crudest terms, the MBA graduates are the Hitler Youth of Megacorp. Just look at how these management institutes describe themselves! Always named after some Megacorp philanthropist. The same applies to hospital wings. Steal from shareholders and employees, yet the positive press burbles and burps over generosity of the biggest exploiters.
And just where did they get all this money from? The Senior Management Team and Vladimir Putin have many similarities.
So, can Megacorp create any good in society? I rather doubt it, but let’s try to be innovative here.
First of all let’s say that Megacorp does employ many people, which is positive sounding to many an economist. However, it unemploys many people, as well. It also subjects many of its workers to mentally unsafe working conditions.
Many Megacorps exploit cheap labour abroad when they outsource to foreign jurisdictions. Employment quality ought to take precedence over simple employment. If a clothing factory creates a thousand jobs in Bangladesh under horrifically dangerous conditions at ultra low wages, how valid is the creation of employment?
In an attempt to create new terms, I say that Megacorp specializes in creating negative, rather than positive, employment whether it be domestically or internationally.
I can say with some conviction, Megacorp offers too many of its employees decent benefits, such as health and dental care, and some sort of retirement income pension plan. We are now at the point that most Canadian workers have no pension plan. Working for a Megacorp just about guarantees one.
How generous it is depends on how the Senior Management Team calculates its own liability for not offering one, or improperly administering the plan. Believe you me, the SMT members responsible for administering the pension plan treat it as a landmine of personal liability.
In the early days of Megacorp, employees were often in defined benefit plans, which meant, although both employee and Megacorp would contribute to the pension plan, the employee would receive a pension payment based on some formula, whether it be on career average earnings or best year’s earnings.
Assuming a solvent employer and accurate actuarial calculations, the employee would receive a “guaranteed and calculable” amount as a pension. Megacorp bore the risk of delivering the promised benefit. It also bore the risk of poor investment returns and claims that it mismanaged the pension fund or plan.
Many Megacorps have realized recently, upon actuarial advice, that these defined benefit plans have left them with huge “pension deficits and unfunded liabilities.” In other words, the SMT has been sucking up so much in executive compensation, engaging in share buy-backs, and increasing dividends to shareholders, to the extent that it has ignored properly funding its defined benefit plans so that huge deficits have arisen.
It forces Megacorp to lobby politicians and have legislation passed permitting them temporarily to maintain underfunded pension plans by posting letters of credit to the pension fund. This means, in simple terms, they are excused from funding what is necessary to fund promised pension benefits.
Megacorp employees are in peril while Megacorp executive compensation rages out of control. Sound like familiar Standard Operating Procedure for Megacorp? Why did the politicians bend over backwards to placate Megacorp?
It is a bit of a useless pissing match to whine and complain what Megacorp has done to protect its interests, regarding defined benefit plans, because it has been mercilessly converting its defined benefit plans to defined contribution benefit plans. It won’t be long before there are no defined contribution pension plans sponsored by Megacorp.
In a defined contribution pension plan, the employee and employer contribute to the pension plan fund, but the pension benefit funding is no longer a concern of the employer. it’s based solely on the performance of funds the employee has selected! This is a very attractive reason to convert defined benefit pension plans to defined contribution pension plans.
Megacorp is still on the hook for the defined benefit promises for pension benefits it has promised prior to the conversion to a defined contribution pension plan, but on a moving forward basis it is off the hook for pension benefits arising out of a defined contribution pension plan.
It has a legal obligation to administer the pension plan in a proper fashion and making its contributions to it in a timely manner, as required under pension benefits legislation, but once it has done those things it is no longer responsible for payment of the pension benefit.
There are very few employees In Canada that benefit from defined benefit pension plans. The exceptions are government employees and some highly unionized Megacorp workplaces, but even in the latter the switch to defined contribution plans is in high gear.
At the end of the day, the Millennials are facing a defined contribution landscape if they are fortunate enough to even have a pension plan. But, it is certainly better than having no pension plan. My Millennial daughter, Lexia, works for a Megacorp International in Toronto and, to my great shock, she has no pension plan!
Before patting Megacorp on the back, we should see how the SMT treats itself!
It benefits from whatever the pension plan offers, but it then offers the higher ranking SMT ”Retirement Compensation Arrangements.” As a big earner, there is only so much you can contribute from your earned income to your pension plan, as permitted under Canadian tax legislation. However, you can set up an RCA for the SMT high earners which permits the SMT to exceed in percentage what salary as earned income can be contributed in their pension plan into RCAs.
RCAs impose a punishing tax on Megacorp contributions made to it, which is borne by shareholders and ultimately employees. The SMT, in effect, ravishes tax legislation to legitimately line their pockets. And of course, the employee benefit consulting firms retained by Megacorp legitimize this corporate looting as being justified by market competitiveness and a part of key “retention of management” strategy.
Wasn’t it Justin Trudeau who promised the Canadian electorate to protect the interests of the middle class? The existing tax legislation, pertaining to RCAs, favours the 1%. Why hasn’t it been repealed?
Working for Megacorp offers employees knowledge and experience on how to survive in their next Megacorp after they are inevitably terminated from the current Megacorp. As the folks who run Megacorp like to say, ”We are offering you skills for life not a job for life.”
Working for Megacorp is a life sustaining skill!
Please remember, I am a bit of a discontent. There are countless Megacorp employees who fall hook, line, and sinker for the Megacorp experience and, like countless sheep throughout history, bleat the Megacorp ideology and persuade themselves they are content, happy, and challenged.
Some are promoted, but most never reach the golden arches of the SMT. As they say, there are plenty of suckers out there.
In conclusion, for a thinking and discerning person, Megacorp throws out chum bait to its employees and admirers with a minority swallowing it while the majority try to grin and bear it to keep the funds rolling in.
Any benefits bestowed by Megacorp to employees are essentially token, diminutive, and a pittance of how the SMT stuffs their own wallets. At best, the employee is rewarded with a paycheque and a somewhat decent benefits package.
At the end of the day, Megacorp employees are expense centres to be calculated, sliced, and diced and often thrown into the street in the name of efficiency and cost reduction. The SMT rises above this crudity unless a particularly greedy, sociopathic, and quasi-criminal cadre engineers a hit of its own, taking out fellow members of the SMT and thereby increasing a bigger slice of the pie for remaining members.
Although I would not exactly characterize this as “good,” one should understand that Megacorp often targets older workers during downsizings and in selective hits. This cull clears the way to hire fresh meat and cheaper replacements, therefore giving some mobility to the younger employees. I am all for mandatory retirement at 65, which I see as a mercy rather than ageism.
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