The first wave of Boomers left school to start work in the mid-Sixties. They were still rising through the ranks in the Seventies and early Eighties, making waves as consumers and young parents. It’s only in the last twenty years that they have started to take control, replacing their own parents in business, politics and the media. In 2010, as chance would have it, Boomers are at the peak of their influence. They are the establishment and the mainstream. Events on the local, national and international stage are played out between them. And the culture we find ourselves living in today is almost entirely down to them.
MASTERS OF THE UNIVERSE: BOOMER BUSINESSMEN
In 1996 the average salary of a FTSE 100 CEO was thirty-six times greater than the average salary in their company. Ten years later, this gap has widened to more than a hundred times.
Business is business; it always has been, and always will be, cutthroat. But just like old-fashioned street fighting (no knives, guns or dirty tricks), the rules of gentlemanly throat cutting have become more ruthless since Boomers took their seats in the boardroom. Best business practice can now be summarized as follows:
1. Kill off / take over the competition
2. Lay off staff
3. Create regulation to cover your tracks
4. Build a business in which a select few get the gold mine and most people get the shaft
The Credit Crunch, and the world economic downturn that followed, is the product of reckless disregard for the rules, insatiable greed and a rollicking sense of self-regard, all characteristics that have become institutionalized in the Boomer business world. It’s no coincidence that the high-flying businessmen from the Pampered Child era refer to themselves as Masters of the Universe.
They mis-sold pensions and mortgages to a public that didn’t know any better. They ruthlessly cut costs, outsourced jobs, stripped assets and worked for short-term payoffs. And they achieved all this by pushing for financial deregulation – gradually tearing up the age-old financial rulebook that was written to stop this sort of thing happening in the first place.
Of course, there have been financial crises and corporate losses in the past. But all of the record-breaking disasters have unfolded with Boomers at the helm. All the big financial heads that rolled during the Credit Crunch, from Stan O’Neal (56) at Merrill Lynch to Northern Rock’s Adam Applegarth (45), were Boomers.
The largest corporate loss in history, $61.7 billion by insurance company AIG, was overseen by Martin Sullivan, aged 55. The American taxpayer bailed out the company to the tune of $182.5 billion. Sullivan received $25.4 million for his trouble.
The largest corporate bankruptcy of all time was posted by Lehman Brothers for $3.9 billion under the stewardship of Richard Fuld, 64. Lehman was one of the world’s oldest and most respected investment banks until, under Fuld, it plunged headlong into sub-prime mortgages. It was forced to sell off $6 billion in assets in 2008, and dragged the stock market, and employees, down with it. Richard Fuld, meanwhile, kept $480 million in pay and bonuses.
It will come as no surprise that all thirteen members of the RBS board, who recently threatened to walk if their £1.5 billion bonuses were blocked, are Baby Boomers.
Last year, General Motors posted an annual loss of $38.7 billion, the largest ever for a car company. Their CEO, Rick Wagoner, is 56. The biggest ever one-day fall in the London Stock Exchange was overseen by Mervyn King, the 61-year-old Governor of the Bank of England.
In 2009, Time magazine published a list of the twenty-five most blameworthy businessmen and financiers responsible for the current crash. Their average age is 61. Our very own Sir Fred Goodwin, age 51, was voted as the greediest banker of all time. No wonder, for he was responsible for the biggest financial loss in the history of the UK.
Fred joined RBS in 1998 after a long and rewarding stint of free education at Paisley Grammar School and Glasgow University followed by work as an accountant. At RBS he soon earned his nickname of Fred the Shred, for cutting costs and jobs. Goodwin built the bank up with aggressive takeovers, and ruthlessly cut staff in order to generate bigger profits. In the same year that Goodwin axed 18,000 jobs from NatWest Bank, he bought a £17.5 million Dassault Falcon executive jet to fly himself around the world. He was knighted for services to the banking industry months later.
During his ten-year reign, RBS made over thirty thousand people redundant. With the money saved, they built new headquarters in Edinburgh for £350 million and headquarters in the USA for $500 million. They splashed out £200 million in celebrity endorsements. As the bank careered towards huge losses, Sir Fred redecorated his office with wallpaper costing £1,000 a roll. He spent £5.3 million lavishly refurbishing a grade A listed building – dubbed ‘Sir Fred’s Pleasure Dome’ by staff – that was barely used. He paid out £100,000 a month on part-time chauffeurs and flew fruit in daily from Paris. Fred the Shred’s reckless Boomer greed finally ended in disaster when the £49 billion takeover of ABN Amro, Europe’s biggest ever banking takeover, stretched funds too far. He left shareholders with the biggest loss in UK corporate history, and the taxpayer with a £33 billion bailout bill. For his services, he paid himself a £16 million pension, drawing £703,000 a year for life.
His self-regard and greed knowing no bounds, he ignored pressure from his shareholders, the media, Parliament and even the Prime Minister to hand back the retirement package. In the end, the universe finally crashed around Master Fred’s ears and, retreating to a gated private estate on the Riviera, he shredded his own pension to £200,000 per year.
