And because it was tax prep week, I am a few days late getting this post together.
Nonetheless, it was a busy week in the business ethics arena:
Wells Fargo was hit with $ 3.1 million in punitive damages by a federal bankruptcy judge over a case involving just one homeowner. The judge called the bank’s handling of the five year long litigation “highly reprehensible.”
Kodak, who has filed for bankruptcy, has requested the court’s permission to issue bonuses to selected personnel to prevent them from being hired away by others. About $8.5 million of the $13.5 million would go to middle management employees and above. This is reminiscent of Enron, which also paid post-bankruptcy bonuses to upper levels of management even as regular employees saw their retirement funds nearly disappear when the company’s stock plummeted.
In a disappointing piece of news, a subsidiary of Johnson and Johnson was found guilty by an Arkansas jury of deliberately hiding risks associated with a multi-billion dollar drug. I say disappointing because I believe that J&J has a long history of ethical behavior dating back to its handling of the tylenol poisoning event many years ago. This week’s decision was against a subsidiary of the company.
And on tax prep week, here’s this interesting item. According to a report from the nonprofit taxpayer watchdog organization Good Jobs First, a number of states are allowing employers to retain the state income tax they have been withholding from employee paychecks. Sounds like a case of subsidizing the company’s profits with money taken from the employee. While one can understand the rationale if the companies involved were small businesses, the report states that corporate beneficiaries of state largess include such profitable enterprises as General Electric, Goldman Sachs, Procter & Gamble, Toyota and Chrysler among others.
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