Why would companies go to bat for these execs that are liabilities? Why not pay out the settlement and send Marty to Zenimax's St Helena division to prevent having to pay this sort of thing out again? (or worse, risk the damage of having someone not willing to take hush money like Mr. Gordon).
>Why would companies go to bat for these execs that are liabilities?
1. Companies are not alive. They are synthetic entities made up of individuals. They do not make decisions on their own. Their decisions are dictated by the decisions of the individuals inside of the company.
2. If I work in AP and receive a notice from a company executive to pay a contract that is signed by said executive (if they have clearance in policy to do so) and the person we're paying, we have all of the back end paperwork we need to pay it out, I'm paying it out. My job as AP is not to judge right or wrong. It's to process according to acceptable accounting practices, in general, and corporate policy specifically.
In other words, why do people act like a company is this mysterious creature able to sort right from wrong, and ignore the influence people like actual executives of that company can have on processes?
"Why would this synthetic entity made up of individuals go to bat for these execs that are liabilities?" I'm not sure that it makes the answer clearer.
It's hard to imagine a company w/o the transparency along the chain of command required to detect and prohibit and executive from getting hush-money rubber stamped. At least not one that actually makes money and isn't robbed blind by its middle-management.
On a side note, I've more than once gotten the trademark HN pedantry about "Companies not being people, but made up of them" and it never surprises me that people feel the need to remind me of it. When someone says "Company X made decision Y", it is short-hand for "The people responsible at Company X made decision Y". This is commonly accepted English.
I don't think companies are mysterious creatures able to sort right from wrong, I think they are made up of individuals who can sort right from wrong.
You focused on the wrong part of that. Yes, it's semantics, but I think having a common definition is important.
Also important - the executive controls processes. Executive level leadership is privy to information that the people who literally process payments are not.
As I said; if the paperwork is in order, AP will cut the check. They do not evaluate right/wrong. They evaluate allowable and/or appropriate based on common accounting practices and specific institutional policies. Many private companies have people who, because they are executives, are absolutely able to take advantage of the company, because they are the ones deciding what is right and wrong for the company.
What I'm saying is, the person processing payment for executive level leadership is not, generally, in a position to ferret out the right or wrong of the various contracts. Unless the contract comes across and says, "this is to keep Loughla's dirty damned mouth shut," I would bet most AP offices would never catch this sort of thing.
I'm not saying that some person in Accounts Payable is meant to launch an inquisition on every cheque that goes out and blow a whistle.
What I'm saying is that I don't understand how a company does not get looted by its execs if they can unilaterally and w/o consequence cut six-figure cheques to what amounts to a personal expense. Someone like Marty sounds like the type of person to have to cut these regularly.
Surely these execs have a responsibility to their shareholders and their board to turn a profit and not misappropriate funds. Marty might be an exec but he's a cog in the ZeniMax/Bethesda machine. You'd imagine someone up the chain would notice that their project is way over-budget and over-time and look at the many zeros on the legal budget allocated to various settlements attributed to one of their rough-shot execs.
To be clear, I'm not saying what you claim isn't true, what I'm saying is that I don't understand how its in the interest of the Powers That Be at ZeniMax to do anything but bury folks like Marty by sending him to the cloud spotting division on the roof.
Not that I'm denying your claim, but if there's that little oversight on the allocation of funds, I fail to see how any of these orgs not get looted before the opening bell rings.
If any exec could just cut (likely many) six-figure cheques for what really amounts to personal expenses while overseeing a project that is allocated too few funds, is way over budget, and over time, then what keeps these orgs afloat?
To reiterate, I'm not saying I don't believe you, I just don't really understand it.
The expense is at least prima facie legitimate. On paper you’re just paying a fee to a contractor in exchange for a NDA protecting the company from liability. If you cover things up well enough, it won’t raise suspicions and nobody is going to go out of their way to investigate their boss.
At a certain point this sort of thing does become unsustainable, but most execs stop short of that point. Also, this sort of thing becomes illegal at some point as well; you can learn about cases where people didn’t get away with it, and then maybe extrapolate from there to see how other people might get away with it.
> Also, this sort of thing becomes illegal at some point as well; you can learn about cases where people didn’t get away with it, and then maybe extrapolate from there to see how other people might get away with it.
Having been in a similar situation on a lot smaller and insignificant scale, I wish I could say something coherent: I wrote and re-edited a long rant here, before ultimately deleting it. But then I see the Adam Neumanns et al. of this world still continuing to be successful despite their numerous public and not so screw-ups that add up to billions, and realize that it's the usual "A times B times C equals X".
I've seen companies spend tens of hours of multiple employee's time to reduce a one-time cost by $1k, and then because of that reduction spend $10k elsewhere.
