Do You Sincerely Want To Be Rich? by Charles Raw;Bruce Page;Godfrey Hodgson

Author:Charles Raw;Bruce Page;Godfrey Hodgson
Language: eng
Format: mobi
Tags: Non Fiction
ISBN: 9780767920063
Publisher: Broadway Books
Published: 2005-05-16T23:00:00+00:00

, and a second \ % was added a year later in 1967.

In March 1969,1 the sales company board fixed the override superstructure as follows:

A gm got 0.25% override.

Where there was one Super-GM, he got 0.25%.

Where there were two Super-GMs, they each got 0.25%, making 0.5% in all.

Where there were three Super-GMs, they got 0.5% divided by

3, i.e. 1/6% each.

Where there were four Super-GMs. they got 0.5% divided by

4, i-e- 0.125%.

This formalized the taking of an extra 0.5 % from the company and the giving of it to the top echelon of the sales force.

It is quite easy to rationalize this decision to hand over part of the company's income to its highest paid executives. One of the recipients, for example, told us that he thought of it, not as something taken from the company, but as an investment made by the company in the future development of its own sales organization.

1 The extra 0.5% was taken away from the Super-GMs after the crisis in May 1970.

And of course, even if IOS had not lived in the legal never-never-land offshore, where there was none to say it nay, it would have been perfectly reasonable for IOS to take a decision to increase executive's compensation at the expense of corporate income. That happens all the time.

But this case was a little different. It must be remembered that most of the Super-super-managers were members of the board of IOS Ltd, or at least of the sales company, where the decision originated. At the time it was taken, the sales company's board meetings were the real forum of decisions: the IOS Ltd board met swiftly, almost perfunctorily, after the sales company's board had thrashed things out for many hours.

Some of the Super-GMs - Eli Wallitt, himself, for example -were active in management. Others were less active. All benefited from the extra share of commission.

What they did, as a group, was to take a decision to pay to certain of the highest paid men in the company money that would otherwise have accrued to the company's profits and to the shareholders. There is no hint that this had happened in the IOS Ltd prospectus. And nothing could more graphically iUustrate the priorities inside the IOS sales management. For all the rhetoric about 'people's capitalism', when it came to the point, the inner circle came first.

And so the German baUoon swelled and swelled, getting weaker in proportion to its expansion. When it popped, all that was left was the usual shrivelled remnant.

The managers rushed off to join other funds. The Super-managers went their various ways. And the salesmen marched off in whole companies, like mercenaries following their condottiere when the pay runs out.

A rump-company remains in Germany, called Orbis-Finanz. But IOS's true monument in Germany is in the Konigsallee in the financial district of Dusseldorf. It is called the Investors Club. It opened in December 1969, at the height of the IOS craze, as a sort of cafe-restaurant, of the kind which is a pleasant institution in Germany.

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