Wednesday, April 1, 2009

Woe is Marsh! Don Should Have Followed the Star!

Don Marsh, the legendary grocery & party icon, takes a hit (no, not of congac) today in the Indianapolis Star from the new management group that purchased Marsh for $88 million.

Current management has sued Marsh for for abusing the company jet on over 300 trips for non-business purposes. All of these allegations may be true, but current management certainly wants to humiliate Marsh, as its complaint includes allegations that he took trips with "female employees" and then spent money on the same trips at "department stores."

Public reaction to this story is interesting, with most commentators taking an either or view. Marsh's defenders say the new group is trying to distract from its own performance woes.

When did our world become so black and white? These two things can both be true: (1) Don Marsh abused company funds, and he should reimburse the company. (2) Marsh’s current management group overpaid for the chain, and even WITH the reimbursement, they’ll still be in trouble.

But there's a larger lesson for Marsh and all other executives contemplating abusing their power. Disguise the trips by doing what The Indianapolis Star did with their Pacers contract!

As readers of this blog know, the Pacers recently took 60 corporate representatives, some from the Star, on a five-day, all-expenses paid vacation to Cancun. When questioned why the Pacers would do this while begging for a bailout from the CIB, the Pacers' spokesperson said the trips were part of their contracts (i.e., "we HAD to take them to Cancun and give them jewelry because that's what our contract with each company required).

Don, instead of just bilking the shareholders outright, which leaves a paper trail, you should have entered into a bunch of contracts with other vendors, overpaid them on the contract, BUT inserted requirements in the contracts that the vendors would pay for a boatload of your personal travel. See how easy it is to abuse corporate perks if you work the system the right way?

The Indianapolis Star needs to release to both the general public and to their shareholders the identity (and title) of every employee who attended the Pacer trip. And any other publicly-traded company with a similar "pay me to vacation" contract with the Pacers needs to follow suit.

Kudos to K.U. professor Dave Stone for bringing the shareholder angle into focus.



Dave Stone said...

Sorry--it's K._S._U., not KU. We're NOT the one with the good basketball team.

iPOPA said...

Dr. Stone:

I'm sure you guys are good at, at least....hmmm....looking at K.S.U. Athletics website.....let me get back to you on that.