Posts filed under ‘Employee Communications’

UC Execs Get an F

Dean Christopher Edley, graduate of the Lloyd Blankfein School of Public Relations

The San Francisco Chronicle reports that 36 top executives in the University of California system are demanding increases in their pensions. The group has written a letter to the UC Board of Regents calling the increase a “legal, moral obligation” and threatening to sue if the demand is denied. The executives cite a 1999 agreement to boost pensions if the IRS lifted a cap; it did so in 2007.

The UC system is currently in a budget crisis, as are all public schools in California and the state itself. Per the SF Chronicle, UC has over $20 billion in unfunded pension obligations. The increase demanded by the 36 executives would cost more than $5 million a year and $51 million in retroactive reimbursements from the 2007 trigger date.

Among possible self-inflicted PR wounds, money grabs are some of the most infuriating. The UC execs have infamous company:

2003, American Airlines. While exacting more than $1 billion in concessions from workers, executives at American Airlines concealed hefty retention bonuses and pension protection for themselves. After outcry, the execs surrendered the perks and CEO Don Carty left the following year.

2009, AIG. After receiving $170 billion in bailouts, insurance giant AIG announced $165 million in bonuses to members of the financial products unit, the company group at the center of the 2008 economic collapse. Public, political and media outrage came swiftly. Most of the top execs returned their bonuses.

2009, 2010, Goldman Sachs. The Wall Street giant has paid billions in quarterly bonuses during the Great Recession. Each bonus announcement burnished Goldman’s image as the epitome of Wall Street greed. The abrasiveness of their PR chief, Lucas van Praag, only worsened the firm’s rep. In an attempt to counter negative reactions, Goldman contributed $500 million to a small business development fund and switched compensation for its advisory committee from cash to stock.

All the above groups, including the UC execs, have made similar arguments: the financial rewards are necessary to attract and retain top talent. AIG’s rationale deserved a special honor for circular logic: the people receiving the bonuses were needed to undo the mess they had created.

As we have become a nation of expendable workers, no one can sustain an aura of indispensability. Scan the comments section accompanying any online news coverage of the UC execs’ pension demands and you will read dozens of calls for the execs’ termination.

Many have already turned the execs’ “a deal is a deal” argument back on them, citing the University of California’s deal to provide quality, affordable education, a deal undone by curtailed classes, slashed staff and hiked tuition. The UC homepage promises the system’s 10 schools will “open their doors to all who work hard and dream big.” The same homepage links to an overview of pension revisions for standard university employees. Here’s a hint: future retirees will take their lumps.

Amazingly, parties with self-inflicted PR wounds have the strength to twist the blade anew. As criticism and scrutiny mounted, Goldman CEO Lloyd Blankfein stated that his firm was “doing God’s work.” Amid the UC pension flap, Dean of the UC Berekley Law School, Christopher Edley, is the only one of the 36 UC execs to speak to the media to date. He defends the demands for higher pensions as important to his family. He sarcastically refers to himself and his 35 colleagues as “craven scum,” acknowledging yet dismissing the PR fallout of their actions.

Predictions for the new year:

  • Outrage and protests will grow as students, students’ families, and ordinary Californians return from the holidays. Social media will increase awareness of the story. I learned about it on Facebook from my state assemblyman, Jeff Gorell.
  • Every politician and pundit with a pulse will be able to score easy points off greedy execs and any milquetoast regents.
  • There will be defections among the 36 executives demanding higher pensions; people were ready to march on the homes of the AIG bonus recipients. By signing the letter to the regents, all these execs now bear a scarlet letter.
  • As self-appointed spokesman for the execs, Dean Christopher Edley stands with Goldman Sachs’ Lloyd Blankfein in issuing cringe-worthy quotes. If he keeps opening his mouth, he may join the league of BP’s Tony Hayward. Like Hayward, Dean Edley may be looking at an early retirement, with or without a fatter pension.

POSTSCRIPT 1: UC faculty launch an online petition condemning the pension demands of the high-paid execs, a group they dub “the gilded 36.” The executives’ disregard for public relations begins with disconnection from UC’s vast internal audience.

POSTSCRIPT 2: California State Assemblyman Jerry Hill introduces a bill to cap all state employee pensions. It would categorically enforce the upper limit of calculable annual income: $245,000. The IRS’ lifting of this rule for UC due to its nonprofit status precipitated the pension demand letter by the 36 UC execs, all of whom have salaries near the standard limit or well above it. The bill is a predictable response to the furor, resembling to moves in the U.S. Congress to staunch the AIG bonuses.

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January 1, 2011 at 2:07 pm 5 comments

Involuntary Transparency

WikiLeaks screen shot. Hard to come by these days as the site is the top target on the Web.

The title phrase–involuntary transparency–comes from Andy Greenberg’s cover story for Forbes on WikiLeaks. A fascinating juxtaposition of the unpleasant and the noble, the term harkens to a post on this blog, “The Automated Honor System.”

Are we truly transparent or honorable when it is forced upon us? Despite the seeming revolution of Web 2.0’s power to disclose and shame, it is simply another example of the Internet providing venerable products and experiences fast-fast-fast, to adapt Anacin’s tagline from 50+ years ago. In short, the Internet is a labor-saving device for delivering consequences, the eternal tool for behavior modification.

Transparency has always been mandatory, but we don’t always follow rules, written or unwritten. Mr. Greenberg’s use of the word “involuntary” suggests the matter has been taken out of the hands of governments and corporations, and by extension all of humanity. My past post on the subject humorously assumes as much.

However, just as the old laws and standards have had a hard time keeping people in line, WikiLeaks will fare little better. “Do the right thing” has rarely been a natural strategy, even though many are calling for such epidemic honesty as the only antidote to the WikiLeaks onslaught.

I am not dismissing the newest demands for disclosure and ethical behavior. I like “involuntary transparency” in a wistful, PR professional kind of way. Nevertheless, transparency must be completely voluntary. It must come early. It must be consistent. It can’t be applied like an anti-virus program. I regularly cite PR legend Al Golin, the man who coined “the trust bank.” From his book, Trust or Consequences:

  1. Trust is the most basic element of social contact–the great intangible at the heart of truly long-term success.
  2. Trust is both a process and an outcome; it’s at the heart of dealing with every relationship.

WikiLeaks will not improve transparency because it is not a vehicle for trust. The confidential communications it has acquired from the American government result from espionage and treason. We can add blackmail to those unsavory terms as embattled WikiLeaks founder Julian Assange threatens a mass release of more damning files, all encrypted and dispersed among a network of supporters, if anything happens to him or his site.

In the end, WikiLeaks is not a game-changer for public relations, although it is a formidable practitioner of the discipline as it has driven much of the news in recent days. It is not a sanctuary for whistleblowers. It is not a virtual version of the World Court. It is simply a brand that trades magnificently on malfeasance, gossip and finger-pointing. In short, it is the greatest tabloid on earth.

December 5, 2010 at 11:37 pm 1 comment

Article in PRNews: United We Stand

prn_masthead_logoI have written an article for PRNews entitled “United We Stand” which explores employee communications during mergers and acquisitions. I draw on my past experiences as a communications executive for a nationwide lender that was purchased in 2007. Mergers and acquisitions are never easy in the best of times, let alone today as companies increasingly fall into each other’s arms in the name of economic survival.

Click here to read the article (subscription required).

Click here to read a list of recommended communication tactics during M&A (subscription required).

June 24, 2009 at 3:37 pm Leave a comment


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