The Service Employees International Union, which has become a strong voice in the immense gulf between wages at the bottom and top of corporate ladders, has now turned its attention to Alltel and the $2 billion jackpot the union says company insiders will hit if the $26 billion private buyout deal of the company is completed.
Says an SEIU news release:
At issue is the basic conflict between managers and directors of public companies who owe a fiduciary duty to maximize returns to shareholders during private equity buyouts, but who frequently stand to personally gain millions from the deal. More than one commentator has suggested this inherent conflict should be regulated by prohibiting management participation in buyouts. In addition, the big private equity firms are now the largest customers and generators of fees to the global investment banks and commercial banks for their stock and bond underwriting, bank lending and investment banking advisory services. These multifaceted relationships with firms such as Goldman Sachs, Merrill Lynch, and JPMorgan Chase led Robert Kindler, vice chairman for investment banking at Morgan Stanley, to say at a recent panel at the Corporate Law Institute at Tulane University, “We are all totally conflicted—get used to it.”
Alltel is the subject today, in other words, but it's happening all over.