Apathy rules! Most people don't care

Apathy is everywhere...in business, in politics, and in life. There were several reminders this week. More people voted for American Idol (63M) than voted for George Bush (62M). Ken Lay and Jeff Skillings of Enron were finally convicted this week after destroying Enron and the pensions and life savings ($2.1B in pensions) of its 5,600 employees. Where was the Board of Directors?

Home Depot CEO Robert Nardelli was paid $38.1M last year, and $245M over the last 5 years, more than $150,000 per work day. Not robbery like the Enron case, but unreasonable for sure. Some boards seem to think that executive compensation works like tips for your waiter at a restaurant. They get a 20% tip based on the total price/revenue. I'm sure you have heard the justifications about creating shareholder value and deserving a percentage of that. Sorry guys but that isn't how you should evaluate the performance of a CEO, and the appropriate compensation. That shareholder value was created by hundreds, maybe thousands, of dedicated employees, partners, retailers, etc. It was NOT created by the CEO alone, and in some cases it was created in spite of the CEO.

Some boards award ridiculous salaries and bonuses to CEOs who are LOSING money. Go figure. Again, where was the Board of Directors? People just don't care. Amazing!

Home Depot is a disturbing example of director apathy and malfeasance. The board of directors didn't even show up for the company annual meeting this week. They should be embarrassed, in fact they should be fired. The Tyco board was also asleep at the wheel allowing Dennis Kozlowski and his CFO to rape the company of hundreds of millions. Their case is on appeal. Sarbannes-Oxley was passed to make executives and boards more responsible for their actions...or in-actions. SOX is a real challenge for small public companies, and a hassle for all public companies, but something had to be done.

The Board of Directors of many of these companies are simply country club buddies that play golf together and really don't know much about the actual operations of the company. Take a look at the bios and resumes of some of these directors. You will many times ask yourself "what could this director possibly add to the discussion? What relevant experience do they have?" This is bad, but you might ask why aren't the major stock holders demanding changes? Major pension funds, private equity funds, and  mutual funds control big blocks of stock and could sway the votes when electing directors or adopting shareholder proposals. Yet, they sit on their hands.

The size of the American Idol vote shows where middle America's priorities really are. My assumption is that many of the 63M American Idol voters are too young to vote in presidential elections. But, it has long been the case that only about 50% of all eligible voters actually participate. And, it only takes 50% of those who do vote to determine the winner. So, we end up with a president chosen by 25% of the eligible voters.

Do bad things happen because there are so many bad people...or because good people don't care enough to stop it? I remember a final exam question from a college political science course. The questions was "Would apathy prevent another Hitler style revolution because they couldn't rally enough people to join, or would apathy allow a small minority to stage a revolution because the majority wouldn't care?"

I am still not sure of the answer to that question. What do you think? Do you care? :-)

Next post I will get back to our regular topics of entrepreneurship and technology. Sorry for the political/social diversion.

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Comments

[mark]

Your average person's attention span can be judged by how they visit websites. The more clicks, the less likely they are to actually get where they'd like to be. Put 50 steps in between them wanting to know where all the money goes and the actual 'screw job' and they'll never get there.

Everyone went nuts over the American Idol vote out numbering the presidential vote. A) That demographic is huge and the factors weighing in are clear and understandable (AI) and B) they didn't have to go anywhere to vote.

It's not really just apathy, it's sloth too.

[Larry Borsato]

Remember too that citizens get a single vote for President, but you can vote as many times as you like for American Idol. It might be interesting to know the average votes cast per person.

And to your point, apathy frequently lets a small majority rule. Look at the debate over Net Neutrality. If the majority cared then the telcos would never even try what they are doing.

A good friend of mine says that people don't care until the bulldozers roll. In other words, until it personally affects them. Otherwise it is just noise.

[Don Dodge]

There are lots of people who care and work hard every day. But it is amazing how many there are in the middle that just float along and don't really care.

Yes it is true that teenagers might be able to vote several times, and some percentage of these kids couldn't vote in the presidential elections anyway. However, the fact remains that only about 50% of eligible voters actually bother to vote. Pretty sad.