Executive Privilege
The Wall Street Journal ran an astonishing story yesterday, depicting a class of laid-off former senior executives unable to scale down their lifestyle to reduced circumstances.
Paul Joegriner hasn’t worked since March 2008, when he was laid off from his $200,000-a-year job as chief executive officer of a small bank. But you wouldn’t know it by appearances.
His wife, Marzena, shuttles their two young children to private school every morning. The family recently vacationed in Virginia Beach, Va., and likes to dine on Porterhouse steaks. Since losing his job, Mr. Joegriner, 44 years old, has had several offers. He’s turned each down in hopes of landing a position comparable to what he held before.
The family’s lifestyle over the past year and a half has been propped up by a $200,000 severance package and another $100,000 in savings — funds the family has burned through rapidly. By Mr. Joegriner’s own calculations, the family will be out of money in six months if he doesn’t find work.
“It will be D-Day,” he says. “But on the outside, no one has any idea that we’re in trouble.”
Given that the lay-offs at the executive level started in January of 2009 and that the one year pay severance packages will be running out after Christmas, it seems like the Kings and Queens of Executive Denial will be having some serious conversations over holiday dinner with their spoiled children and spouses. Exactly how they could live for a year out of work without adjusting their spending habits says something about the “keeping up appearances” nature of the upper middle class in today’s America.
Welcome to the real world.
Same on the bank that hires him back, based this display of fiscal discipline. Let’s see — does a bank really want to hire a guy who has essentially lived in credit for the last year?
cmackg
November 11, 2009 at 9:39 am
At the Golden Handshake level? Yah, sure, ya betcha! He obviously understands how to live off the float.
JTMcPhee
November 11, 2009 at 11:49 am
Actually it makes perfect sense to me.
In the absence of a viable middle class and normal upward mobility – I’d keep up appearances as long as possible too for the chance to keep my status as a member of the upper class.
If nothing comes up in the next six months – then he’s lost his ticket to this exclusive club anyway. He’s going to have to pull his children out of the private schools and the connections they can make there. Connections that in all probability can ensure their future.
From a purely strategic viewpoint he’s playing his cards right, even if he’s bluffing.
(which is not to say that his wife and children aren’t spoiled. Just that he’d like to keep them that way..)
Armand Asante
November 11, 2009 at 2:35 pm
Why doesn’t that surprise me? Someone who looks down on the ‘little people’ can’t comprehend living with reduced income and scaling back after they lose a cushy job.
I hope reality hits this guy hard in the face.
Cameron
November 11, 2009 at 5:03 pm
In a similar vein: new trends in UK shoplifting.
Seth
November 11, 2009 at 8:51 pm
Actually I have to link this article in two different threads. This banker is small-fry. Executive privilege? Let’s talk about the people skimming hundreds of millions or billions off the top.
Dan
November 12, 2009 at 5:59 am
Can we stop calling these people “middle class?” They’re rich. Why is it that brown people are the only ones in this country who can get rich and admit it? Is it just that, if you’re in a certain class, you always know someone who’s an order of magnitude wealthier than you? It’s as though if you’re not Ted Turner, Warren Buffet or Bill Gates, you’re always willing to push that “upper” level of “middle class” a dozen stories higher than whatever floor your penthouse is on.
Space Toast
November 12, 2009 at 8:42 am
You know if a HR director who is interviewing this guy is ever bored and decides to Google his name, this article is about the 8th hit that comes up, which I think is funny. Guys (and gals) with unique names need to watch what gets associated with them. I know if I was hiring for a bank I would have concerns hiring after reading how well he handles his own money. (Well that and article that is about the 10th hit which states that back in Oct of 2007 and he had a job as CEO of American Partners Bank, that he announced that “the credit crunch probably has reached the bottom.” http://www.gazette.net/stories/101807/busiplo174235_32359.shtml
Gosh this guys has such amazing financial skills, I can’t imagine why is currently out of a job.
Nora
November 12, 2009 at 9:00 am
Toast:
“Rich” is an assets thing. This Joegriner guy in the article Jon posted obviously isn’t rich. Sure he *had* a 200k annual income, but it was contingent on working at a demanding job subject to arbitrary dismissal. His severance package was pretty sweet, but again no long-term security to it.
If he had that much income from T-bills, then sure I’d call him “rich”. But 6-months from running out of cash and negative equity in his house? Not remotely “rich”. Just a skilled professional whose main asset is his own potential for future earnings. Jon’s “upper middle-class” is a polite way of giving him some credit for his prospects of getting back into a highly-paid job.
Seth
November 12, 2009 at 12:06 pm
Behold, one the psychological underpinnings of “sticky” wages. People’s ego.
Dumb and irresponsible and they’ll deserve whatever comes for this imprudence.
John Papola
November 12, 2009 at 1:33 pm
I think some of you guys with lifetime tenure at universities whose endowments exceed the GDP of many countries may not always be in touch in with the tenuous realities of being salary men in the real world.
Elux Troxl
November 13, 2009 at 8:44 am
Any more, Elux, NOBODY has any security — job, community, anything. That includes the disappearance of “tenure.” As to the former “social contract” between employers and employees, all that shit about loyalty and pensions and such, there are lots of folks, including posters here, who applaud the “efficiency” of that “new, improved” Brownian motion of people, that wonderful “flexibility” of virtual corporations and ad hoc work groups and all that. Which of course for the few that can “work” at that pace and with that degree of gymnastic artistry, and somehow get paid enough to not only meet their present needs-and-wants expenses but “save for their old age” (and of course without regard to aging parents or notions of extended family) may work out just fine. But it seems to me there’s a limit to how much “wealth” can grow out of a farmer’s field where the topsoil is disappearing, the ever-more-vulnerable cultivars are threatened, and it takes a shitload of oil to lubricate the whole system. But I am reassured that “innovation” and the “free market” will keep it all going, neh?
JTMcPhee
November 13, 2009 at 9:35 am
Huff and puff and all the same stuff.
Humanity is a flawed, imperfect lot, buddy. Fretting over that reality is a tremendous waste of resources, though I do think it brings you pleasure. Why else would you repeat the same song in the same key so often? Our actions reveal our true highest interests.
Meanwhile, the world has, in fact, been getting better on a remarkable trajectory since about 200 years ago. The minor zigs and zags of the chattering class is but a footnote in the amazing march of technological progress that has unlocked so many great (and sometimes not so great) wonders.
The best security is what it always has been since the beginning of time: savings. This time is no different. Those who save stand prepared to weather the storm or the long winter. But that, of course, means you can’t eat all of your seeds in the summer. If only the crooks and liars in high office echoed that simple, natural truth. Instead, all we hear is talk of the need for “consumer spending” and wicked schemes to jolt “consumer confidence”.
Confidence comes back when savings are built up to a sufficient level where risks can be more comfortably taken. That’s the turning point. That’s when the bull turns to bear.
There are no angels to deliver our tranquility in this life. We must work together in peace to make it for ourselves as best we can. And if you don’t think it can be done in peace, there’s certainly no reason to expect that among this wicked lot can emerge a leader who is anything but a tyrant.
John Papola
November 13, 2009 at 5:47 pm
Reality is overrated and too expensive to produce. I hear Fox is canceling it in midseason.
len
November 13, 2009 at 9:26 am
This guy is a major douche bag. He needs to realize how technology has completely changed the way businesses operate. This clown was getting paid to much to begin with and was replaced by a more efficient infrastructure. There are loads of people like this out there. It’s too bad they all lived beyond their means.
mj
November 20, 2009 at 10:01 pm
Magic jobs don’t exist, and who wants to be hired by a shell company?
America needs to know who its friends are, those companies capable of hiring, and those who merely exist on paper, and who its enemies are, the ones who don’t pay taxes, and are used as mere conduits or pass-throughs that share their balance sheet with other companies who themselves may be either legitimate or not.
In order to find a job, there must be a legitimate company willing to hire. Where are those companies?
Pat
November 22, 2009 at 6:56 am