Even a cursory reading of the business press reveals a plethora of stories about CEOs or private equity moguls walking away with hundreds of millions while the companies under their charge lay off workers and/or file for bankruptcy.
Just last week, Vikram Pandit was
forced out, er, resigned, from his post as CEO of Citigroup. having been paid over $260 million during his tenure while presiding over a 90% drop in the company’s stock price.
And this morning, Bloomberg reports that the private equity moguls behind the largest LBO in history have paid themselves $528.3 million in fees as the company teeters on the verge of bankruptcy – a bankruptcy that will be the direct result of the enormous debts that KKR and TPG piled onto the company in the first place.
The greed, and in many cases outright fraud, has become so brazen that one has to wonder: are these people psychopaths?
And the answer, according to Scientific American, is that, in fact, they are.
In an October 2012 article entitled, “The Wisdom of Psychopaths,” the author finds that psychopathic serial killers and business/political leaders share many of the same traits, namely:
a grandiose sense of self-worth, persuasiveness, superficial charm, ruthlessness, lack of remorse and the manipulation of others … [and that] such a profile allows those who present with these traits to do what they like when they like, completely unfazed by the social, moral or legal consequences of their actions.
In the words of Jon Moulton, one of London’s most successful venture capitalists, determination, curiosity and insensitivity were the three most valuable character traits that vaulted him to the top.
The first two are taught in business school. But the third?
As Moulton explains, the great thing about insensitivity is that “it lets you sleep when others can’t.”
The professionals who used to at least try to put a check on this sort of thing are no longer in positions of influence (see “The Rot Runs Deep: The Capture of the Professional Class“).