Fiduciary Duty (8 page)

Chapter 2. Synergies

But I’m getting ahead of myself again, because between the merger and the offer letter, there was the webinar. The webinar was a broadcast to the entire staff of the newly-merged company. It starred Fred Phillippi, a.k.a., “Uncle Freddy,” the CEO and Chairman of the Board of M & O, and Donald Angle, his erstwhile counterpart at the acquired company.

Angle was now President of the merged operations, and his first official act apparently was announcing he’d be retiring in a year, no doubt after collecting another large bonus and presiding over many a meeting at the golf course. Then Uncle Freddy stepped front and center. In the same sentence, he congratulated us on successfully completing the merger and told us there might be further “adjustments to staff levels.” We were also told that each and every employee of the company would have his or her position evaluated so that the maximum possible efficiencies could be extracted.

I was watching the webinar in the big auditorium and the gasps were audible. A lot of people were surprised, proving, once again, the adage that there are none so blind as those who would not see. After all, it wasn’t just the constant “save on labor costs” messages from the pro-merger side of the merger battle. It was also that this wasn’t the first, or the second, or even the third merger by M & O in the last decade and a half. Some of the old timers had been through seven or eight mergers, and layoffs were as inevitable a byproduct of mergers as the bonuses were to those doing the firing.

Uncle Freddy went on to explain the process. The top executives, having recently been rewarded with hefty bonuses, would select Vice Presidents of the new, merged company. Then, the Vice Presidents would meet to determine who would be the Directors who stayed on. Then, Directors and Vice Presidents would select Managers. Finally, Managers, Directors, and Vice Presidents would determine which of the rank and file would be selected to remain with the company. Those who were offered lesser positions than they currently held, or reductions in pay, would receive one of the dreaded offer letters. Those offered nothing at all would simply be asked to leave. Uncle Freddy assured us the entire process would take about two months. He also described the process as “relatively painless” and thanked us for our patience.

Two weeks later, an e-mail went out announcing the names of all Vice Presidents who were to stay with the company and also announcing the retirement of several others. That was my first inclination of bad news for me: Arnold Dion, the Vice President who had previously run the organization I was in was on the list of retirements. I saw Arnie later in the day walking the halls. The grin he was wearing barely fit on his face, so his package must have been pretty good.

The next morning, those of us in what had been Dion’s organization were called into one of the conference rooms by the new VP, Stan Delacroix, and his boss, Danny Rogers, the division president. Delacroix was a large bullet-headed man with a short annoying laugh which he unleashed on his subordinates an average of twice a minute. Rogers was tall with a mane of silver hair. They were the only two people smiling in the room – the rest of us, naturally, were worried about our jobs. Delacroix assured us, with Rogers sagely nodding behind him, that the company understood our concerns and that everything was moving forward as quickly as possible. He went on to talk for fifteen minutes, during which time he said absolutely nothing and then repeated himself at length. Finally, he asked whether there were any questions. Nobody was stupid enough to take the bait and we were dismissed.

Two weeks later, Delacroix sent out an e-mail to his entire organization. The e-mail listed the Directors who were going to be reporting to him and their respective areas of responsibility. The Director to whom I had previously reported, Mike Hammer (yes, that was his name) was not on the list. That was a shock, as Hammer was one of the most competent people I had come across in the company. I went to see Hammer in what would soon be someone else’s office. Hammer looked very unhappy – Delacroix had handed him an offer letter a few minutes before the e-mail had gone out. Hammer was being allowed the opportunity to accept a demotion to manager. His paycheck would remain more or less intact. His career, not to mention his self-esteem, was in tatters.

The pattern was already obvious – bigwigs for whom there was no room could stay on for a full year and get a big check at the end, VPs to be eliminated got a nice package, and Directors who were inconvenient were to be demoted. Things clearly got uglier the further down the totem pole you went. I figured that at my level – I was a manager – those who weren’t in favor would get a demotion and a stiff pay cut. One level down from me, there would be a simple firing. At the bottom rungs, it wouldn’t be pretty at all.

“A janitor on the outs will probably be made to run the gauntlet,” I told H, grimly.

In any case, the next morning, Delacroix’s entire organization crowded into a conference room. This time, Rogers wasn’t there, but nevertheless, Delacroix wasn’t the only one smiling. His four Directors also looked very pleased. The rest of us whose jobs were still in limbo were still glum. Hammer wasn’t there. Neither was the other former Delacroix Director who had been demoted.

As he had two weeks earlier, Delacroix told us the company was moving as quickly as possible. Then each of us was assigned to one of the Directors on a temporary basis. The Directors would be interviewing each member of their temporary staff as part of the employee selection process. Each of the Directors was then asked to say a few words. We learned less from them than we did from Delacroix.

The Director to whom I was assigned was Barney Talbot, who had been promoted from manager about three months earlier. Talbot was the son of Bradley Talbot, the congressman from Cleveland. He was a tall, amiable guy with the mental capacity of a ham and cheese sandwich, assuming that the sandwich had no ham, no cheese and no bread. His meteoric rise in the company was clearly part of a tacit “you scratch my back and I’ll scratch yours” understanding with the congressman.

The arrangement was not without risk for the company as it turned out the congressman took an unusually active interest in his son’s career path. This was discovered when the younger Talbot was given what had previously been thought to be a relatively safe spot from which he could do no damage, namely Manager of Party Lines. Yes, we still had a handful of party lines, grandfathered in somewhere in Amish country. Nobody had anticipated that the Public Utilities Commission of Ohio, a.k.a. PUCO, an agency well stocked with the congressman’s allies, would begin making vague noises about the need to upgrade those lines. Within weeks those vague noises had grown into an official request that the company look into expanding party line service due to “growing demand.” Talbot was quickly transferred, becoming “Manager, Long Distance Services,” whereupon PUCO’s recent and inexplicable concern with party lines ended abruptly. As an added bonus, ten days later the PUCO rubber stamped the rights of way for a new long haul cable over the objections of eight thousand seven hundred and four property owners through whose land the cable would pass.

More recently, after numerous complaints by both consumer and business advocacy groups, PUCO had formed a committee to look into the company’s pricing plans for residential and business landline customers. M & O’s solution was to promote Barney Talbot to “Director, Landline Pricing.” That was followed eight days later in the committee’s dissolution. When the restructurings within M & O came, they were clearly viewed as an opportunity to get Talbot away from Landline Pricing where he could, in theory, cause some serious damage. However, nobody quite knew what to do with him so he was simply given the title “Director of Special Projects.”

It was in his new, supremely vague “Special Projects” capacity that I went to see him for my interview. We discussed golf. Talbot really, really loved golf. I don’t golf. I don’t like golf at all. I didn’t feel very good about the interview.

Over the next few weeks, all of us who weren’t newly-minted VPs or Directors waited nervously for word on our jobs. Morale was very poor and the general level of anxiety increased every day. And then morale got even worse. On the day manager-level spots were to be announced, Uncle Freddy sent out an e-mail saying the company wanted to put extra care into decisions regarding managerial positions and below. According to the rumor mill, the twin forces of nepotism and favoritism had guided the work assignments to such a degree that even the top executives driving the preferential treatment had gotten concerned. Another week went by, and then another with no word. Not much was getting done. People would meet in small groups and grumble. One could almost see the company slowly grinding to a halt.

Four weeks to the day after the manager-level slots were originally supposed to be announced, they were. An e-mail went out to everyone in Delacroix’s organization listing all the new managers. My name wasn’t on the list. It was like getting kicked in the chest. I sat in my chair, dumbfounded, for about ten minutes until I heard a knock.

Talbot walked over and, with a smile, handed me an envelope.

“Good news, John,” he said. “I managed to secure one of the Analyst slots for you.”

I looked at him, shocked. He was serious. He really thought I would consider the demotion to be good news.

“Unfortunately, there’s a bit of a pay cut,” he said, “You’ll have to read through the offer letter to get the details. But you’re lucky. A lot of people are being let go.”

As Talbot walked off to hand another “lucky” person a letter, I slit open the envelope.

Chapter 3. The Offer

“Dear John,” H began, “We have recently completed the corporate staff review and are pleased to provide you with an offer for a position in the newly-merged organization.”

H was livid. I rarely saw her so angry.

“‘Pleased to provide you with an offer’? They actually wrote this? Oh my God!”

I could see the tears in her eyes. And she had a point; it was an incredibly insensitive way to tell an employee they were being handed a big demotion and pay cut. But I had read the letter several times already, and I knew the insults got worse as the letter went on.

H continued, “‘The details of the position are as follows: Title: Senior Analyst.’ Senior Analyst! You were a senior analyst 15 years ago! And that salary? Are they kidding?”

Until I came to M & O, my career path had been, if not, exceptional, then at least enviable. I had started as an ATM installer for InterAmerican Bank Machines Unlimited, a twenty-person outfit in Palmdale, CA, while getting my degree in electrical engineering. Three years and four promotions later, I was Director of Operations of the tiny company

I decided I didn’t like ATMs or Palmdale, so I took a job with Hover Anselm, a manufacturer of telecom switching equipment in San Ramon, east of the San Francisco Bay. Once again I rose quickly: analyst to senior analyst, senior analyst to manager, manager to senior manager, and senior manager to director. Then I left to get an MBA at UCLA, after which I set out on my own as a consultant for a few years. But since being recruited by M & O, my career was nothing but a series of backward steps and broken promises. A senior analyst title would truly put me back close to where I had started.

H went on reading the letter. The next few lines digressed from the boilerplate and provided details of the job – I would report to Barry O’Connor, who in turn was reporting to Talbot. The letter didn’t mention that O’Connor was almost as much of an idiot as Talbot, but unlike Talbot, he was extremely mean. Perversely, he sported a small, extremely neat goatee and mustache, which combined with his tall, skeletal physique and small, dark eyes made him look like Old Scratch come to tempt some poor bastard into giving up his soul. I had worked with him on some projects and did not relish the idea of reporting to him.

The letter went on to advise me that my new position would make me ineligible for participation in both the long-term and short-term incentive plans. My new position, if I accepted it, wasn’t even eligible for an end-of-the-year bonus.

H continued, “Any compensation increases detailed above will be effective retroactive to the last payment in the month of February. Any compensation decreases detailed above will be effective at the beginning of the next pay period.”

Obviously there weren’t any increases to be applied, retroactively or not.

“You may be eligible for severance benefits in accordance with the company’s severance plan if you decline the offer. For more information on this, please refer to the web portal,” H read.

“So what are the severance benefits?” she asked.

“I don’t know,” I replied, “The portal says only that severance pay would equal up to a week and a half of salary for each year worked. But I called HR and couldn’t get anyone to tell me if I would actually get anything. All I know is what the letter says, namely that I may be eligible.” I stressed the “may.”

“Great,” H said, “Continuing on… Due to the pressing need to finalize – ”

She stopped. “Have you noticed how convoluted this is? These sentences are awful.”

I nodded. The document had clearly been ping-ponged between HR and legal, and what little clarity it had started with had deteriorated in the process.

She went on, “Due to the pressing need to finalize the new corporate organizational structure, you must make your decision to accept or decline this offer within two business days. You must complete the form at the bottom of this letter and return it to me by 5:00 PM on Monday. If your written response has not been provided to me by that time, it will be assumed that you have accepted the offer, and any failure to report to your new job will be considered a voluntary resignation that would render you ineligible for severance benefits.”

H let out a long breath, “Don’t they know close of business Monday is three business days? Can’t these morons even count? But where is the form? There’s no form to fill out at the bottom of the letter.”

“Well, it is actually on a separate document all the way in the back,” I said, “But keep reading.”

“OK,” H said, continuing, “I hope that you will carefully consider the offer and choose to continue your employment with Michigan & Ohio Telecom. Regardless of your decision, be aware that I appreciate your work and wish you every success. If you have any questions whatsoever, please contact me immediately.”

H peered at the signature, “So who wrote this thing? Who are you supposed to contact with questions?”

“Beats me,” I replied, “I can’t read the signature at all. And nobody at HR is answering the phone.”

She turned the page. The next sheet had a little table indicating the old pay and benefits and new pay and benefits. It also helpfully indicated that the offer represented a 26% reduction in salary and a 41% reduction in total compensation.

“So what do we do?” H asked, “You can’t quit. The job market is just awful right now. But you can’t take the offer either. You’ll look like Wallace if you do.”

And that, in a nutshell, was the problem. The job market was awful. Unemployment was at its highest rate in my adult life and inching higher. The news featured lots of stories of people who had been unemployed for a year, two years, or more and had exhausted all their unemployment benefits.

Theoretically, I could accept the new, lower paid position and keep it while applying for another job. But accepting a step back of that magnitude was career suicide. I remembered from the last time I looked for a job that new employers were keenly interested in one’s salary history and title. I was a valuable commodity because my career path had always followed an upward trajectory. Until M & O, that is. The last few years at M & O really hurt me. First, the nebulous title of “Executive” I was hired with had somehow been transmogrified into a “Manager” handle a year after I arrived. But to drop down to Analyst, and to take a 25% cut in salary to boot?

H was right. Accepting that would make me look like Wallace. Wallace was kind of a legendary character at M & O, brought up as a comparison whenever stupid mistakes were made or discussed. At first I had thought he was apocryphal. Eventually, I found out he was a real person who had worked at the company a decade before I started there. Wallace had been a service technician. In his short tenure at the company, he had managed to set fire to two buildings, crash three trucks and run over a co-worker. His colleague had survived, but he hadn’t walked again for over a year. Being related to heavy brass kept Wallace from getting so much as a negative evaluation, at least until he somehow – to this day nobody quite knew how – sent a pulse through the network which fried, among other things, every remote switch the company owned in Cuyahoga County. That pulse ruined over fifty-six million dollars worth of equipment and left a few million customers without telephone service for up to three days. After that, even his uncle, a VP in the Finance department, and his other uncle, also a VP in the Finance department, couldn’t save him.

If I remained, I would be letting M & O generate a signal for future potential employers that I was inept, having accepted not just one paper demotion from Executive to Manager, but also a second demotion to Analyst, and a salary below what I had made a decade earlier. So I was damned if I went, and damned if I stayed. But, what we didn’t know was how damned I’d be if I left. Put another way, I didn’t know the size of the severance package. If any.

H and I batted around various scenarios and stayed up most of the night. It wasn’t a good night.

The next morning, Friday, I went to work. I put in several calls to HR, and sent a number of e-mails as well, but got no response. Barry O’Connor, my new boss, came over to talk.

“Just remember from now on that I’m the boss and we’ll get along just fine, hotshot,” he said.

“You got it, boss,” I said half-heartedly.

But surrender wasn’t enough for O’Connor.

“Forget that and I’ll make your life a living hell,” he said, “Let me give you some advice. Your wings just got clipped. I dig. It sucks to be you. Deal with it. I have something big I want you to work on next week with Henry and I want that ‘tude’ of yours gone by then; capeesh, hotshot?”

Without waiting for a response, O’Connor walked away. I called HR again. And again. There was still nobody answering the phones.

I put my face in my hands.

“Can I talk to you for a second,” someone said.

I looked up. It was Peggy Watanabe, Arnold Dion’s old secretary. She had been assigned to another VP, but occasionally still had business on my floor. I had worked with her on organizing a tornado relief fund the year before and always found her to be one of the unsung heroes of the company, someone without whom the organization couldn’t work.

“I just heard Barry O’Connor saying—” she said.

“I know,” I interrupted, exasperated.

“I take it you must have gotten an offer,” she said, “Are you going to take it and work for that asshole?”

“I don’t know,” I said, “H and I need to know what’s in the severance package to decide. But I can’t seem to get a hold of anyone in HR. I don’t even know who signed the letter.”

“I know people in HR,” she said, “I’ll have someone call you.”

Whatever Peggy did, within a half hour, I got a call from Mortimer “Gordo” Gordovsky. Word was that Gordo had been with the company since the dawn of pre-history, or at least thirty-five years. Word was also that he had once been a very thin man, and that Gordo had been an ironic nickname, but that at some point, around twenty years ago, he had ballooned up to over 400 pounds. For a long time after that, he had tried, seemingly with some desperation to shed his longstanding nickname with no success. He was now an extremely bitter man. He was also, apparently the company’s point man for conveying information on the severance agreements. Naturally, he wasn’t happy to be conveying information on the severance agreement to me.

Gordo reluctantly told me I was indeed eligible for the severance package, and if I took it, I would get one and a half weeks of severance for each year worked. In my case that amounted to 6 weeks pay. In addition, I would get paid for the week of vacation from the previous year that I hadn’t used up, as well as the three weeks of vacation I had received for this year but hadn’t spent either. Additionally, if I took the severance package I would still be awarded the stock options I was scheduled to receive, though they would be pro-rated.

All told, according to Gordo the severance amounted to about ten weeks of my current salary. I quickly did the math and realized that it would take three and a half months to earn that amount at the new, lower rate of pay. Put another way, if I found a job within three and a half months time, I would be financially better off leaving now rather than taking the lower-paying position. And that, of course, didn’t account for the reduction in future earning potential that would come from accepting a demotion.

Gordo also told me the terms of the severance package might require me to stay on for up to 30 days training a replacement, depending on whether Barney Talbot, my director, felt it necessary. If I did need to train a replacement, I would remain at my old salary during that time. Then I asked him who I should formally notify of my decision to accept or reject the severance letter. Gordo said I could simply inform Talbot, and Talbot would take care of it. I was starting to sense that the process, at least as it involved me, put a little too much faith in the hands of someone who wasn’t very bright. Not that I had any choice in the matter.

H and I discussed what to do all weekend. We went back and forth on accepting or rejecting the offer. It wasn’t an easy decision but we decided leaving the company was the best option. On Sunday I went to the office with a box and cleared out all my personal items. It was all trivial stuff. The only thing I really cared about was a pencil sketch H had made of the three of us walking across a footbridge on Jeremy’s first birthday. I folded up the sketch and put it in my wallet.

Monday morning I walked into the office and turned in the slip accepting the severance offer to Barney Talbot. Talbot seemed genuinely surprised. He blinked twice, considering what then to do next. Then he hunted through a binder full of envelopes until he found one with my name on it and then he handed it to me. After that, he awkwardly shook my hand and wished me luck.

I walked out without opening my envelope. For good measure, I e-mailed Gordo and called him to confirm that I was taking the severance. Not surprisingly, I only got Gordo’s voicemail.

After that, I opened up the envelope Talbot had handed me. Inside was a letter from HR. The letter informed me that I would be considered an employee of the company until I had a severance meeting with HR. The date of the severance meeting would be scheduled within a few days and I would be informed of when I had to come in at that time.

I walked back to Talbot’s office and asked him if the letter meant I had to stick around.

“No. You’re free to go any time. But if we need you, you might have to come in now and again. But just through the end of the month,” Talbot said.

I thanked him. Once again, he blinked twice, awkwardly shook my hand and wished me luck.

Then I walked through the cubicles saying goodbye to people. As I walked past his desk, Barry O’Connor flipped me the bird. I gave him a broad smile. He called me an asshole. I broadened the smile.

Ten minutes later, I grabbed my bag and headed for the door. On the way to the stairs, I ran into Barney Talbot. For the third time, he blinked twice, awkwardly shook my hand and wished me luck.

Ten minutes after that I was in my car driving home. I was now unemployed, or would be once I went through the severance interview.