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Paul Allen claims in his book that Bill Gates tried on more than one occasion to reduce Allen’s relative ownership interest in Microsoft. Of course, the veracity of Allen’s explanation can be questioned even if the factual changes in percentage terms are a matter of public record. In focusing on whether Allen’s explanation is credible, The Wall Street Journal overlooks more fundamental category mistake in reckoning ownership as a species of compensation. Such an error may reflect a hypertrophy involving the value of money in American society—an exaggeration to which the journal may be susceptible as the foremost mouthpiece of American business.

The Wall Street Journal reports that Paul Allen has some critical things to say about his co-founder of Microsoft, Bill Gates. In general, Allen asserts that Gates tried more than once to reduce Allen’s relative financial ownership in the company. Whereas the journal focuses on the veracity of Allen’s claims—ultimately questioning the man’s credibility—I find in the story a case study on the difference between ownership and compensation for labor and on corporate leadership. I contend that the difference may often be minimized in business as well as by society, while particular CEOs are unduly projected onto the societal stage essentially as societal leaders.

Allen also claims in his book that in the mid-1970s, when he and Bill Gates were two college dropouts were based in New Mexico, Gates asked for 60% of their partnership because of his greater contributions to the creation of software for running the BASIC programming language on an early PC, the MITS Altair 8800. Allen says he had assumed that their partnership was evenly split, but he agreed Gates' request anyway. Several years later when Gates and Allen established Microsoft as a formal partnership, Gates asked to change their respective shares in the business to a 64-36 split, a demand to which Allen again agreed. Furthermore, in the early 1980s, Gates rebuffed Allen after the latter asked for an increase in his own Microsoft shares after his work on a successful Microsoft product called SoftCard, Allen writes that he was deeply disappointed in Gates’ response; he had known Gates since they were students at a prestigious private school in Seattle. "In that moment, something died for me," Allen writes. "I'd thought that our partnership was based on fairness, but now I saw that Bill's self-interest overrode all other considerations. My partner was out to grab as much of the pie as possible and hold on to it, and that was something I could not accept." Allen recounts that he sucked it up and thought, "OK…but one day I'm out of here." 
                                       
                                    Bill Gates and Paul Allen, co-founders of Microsoft

                                       By Doug Wilson/Corbis, printed in The Wall Street Journal 

Furthermore, Allen asserts that in 1982 he eavesdropped on a discussion in the Microsoft offices in Bellevue, Wash., between Bill Gates and Steve Ballmer, who went on to become the company's CEO. Allen claims that he heard the two men talking about his recent lack of productivity and how they might dilute his equity in the company by issuing options to themselves and other shareholders. Allen said he burst into the room and confronted the two men, both of whom later apologized to him and backed down from their plan. "I had helped start the company and was still an active member of management, though limited by my illness, and now my partner and my colleague were scheming to rip me off. . . . It was mercenary opportunism, plain and simple." If so, then the vaunted veneer of societal leadership that Bill Gates has attained by virtue of his achievements in software, sheer wealth, and philanthropy may be a projection of something more than the man, and thus a reflection of societal values.

Of course, there are two sides to squabbles, and this case is no exception. Gates's attempts to lower Mr. Allen's stake in the company reflected concerns that Allen wasn't working hard enough and wasn't commitment to the company, say people familiar with the relationship according to the journal. That was one reason, these people say, why Gates put a provision in their first partnership agreement that would allow him to buy out Allen if he thought there were "irreconcilable differences" between the two men. Allen refers to the provision but does not include a reason for it, which is telling. Furthermore, third parties with knowledge of meeting to which Allen refers claim that Allen puts himself in meetings that he did not in fact attend. If true, Allen’s claims regarding Gates could also be doubted, though there is factual support for the changes in ownership percentages even if not for the reasons.

If Gates was putting more effort into the business, an argument based on that could be made that he should receive a higher percentage of the ownership so he would receive more dividends. However, it could also be argued that ownership, unlike compensation, is based on having founded a business (or having purchased the rights to such a basis by buying stock-ownership). Gates may have conflated compensation with ownership in demanding a greater percentage of stock, essentially regarding the latter as compensation in treating dividends as a form of salary. Such a conflation may distort property ownership in a way that minimizes the fundamental difference between an owner and an employee. Of course, an owner can work as an employee of his own business, but the two roles are distinct. Gates’ mistaken notion of ownership may have been formed out of a society that over-values executive compensation, and more generally money. Consider, for example, the much higher compensation packages that American managers receive relative to their European colleagues. Relatedly, the ratio of executive to “lower level” employee compensation in the U.S. is much higher than in the E.U.  Such differences point to differences in societal values, and such values can, if exaggerated, lead to category mistakes. So Allen’s complaint against his boyhood friend and business partner may actually be a critique of a much larger problem in American society.

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A year after the financial crisis of 2008, Lloyd Blankfein, the CEO of Goldman Sachs,  found himself vilified for his firm’s quick return to risky trading in spite of its new bank holding company status. Populist resentment at the time was especially pitted against the hefty bonuses from the trades. Also, people were upset about the benefits that the bank had obtained from the decisions of its alums in the U.S. Government—specifically, in the U.S. Department of the Treatury. For instance, Goldman Sachs and other AIG counterparties got a the dollar-for-dollar payout from AIG thanks to an infusion of funds for that specific purpose by Treasury. Regardless, in an interview with the London Times, the highest-paid CEO (at least in the financial sector) dismissed such talk and defended his money-making machine and its compensation.  In addition to being the engine of economic recovery, according to Blankfein, Goldman Sachs provides a social function in making capital available to companies so they can expand. Stunningly, he adds, “I’m doing God’s work.”[i]  Such a claim is a far cry indeed from Thomas Jefferson’s warning that banking institutions are more dangerous to our liberties than standing armies.[ii]  Perhaps God intends to undo our liberties by bailing out the banks.

Besides these rather obvious problems with Blankfein's religious claim is his presumption to know what God's work is, and, furthermore, that he is doing it.   Even though a feckless system of corporate governance can enable a CEO to essentially function as his or her own boss, including doing the board's job of evaluating his or her own performance, it is a tall order for a human being to be able to evaluate his performance as God's work.   To be sure, it is possible that God is an intelligent being that bestows favor on his golden stewards for doing His work.

Lloyd Blankfein may have been involved in two conflicts of interest: 1) that of having excessive power over the board whose principal task it is to oversee him, 2) having communicated with GS alums in high posts in the U.S. Government (e.g., Hank Paulson) and perhaps having them enact policies on GS's behalf.   It may be that institutional and personal conflicts of interests can become so ubiquitous that they are simply not seen by the culprits. Furthermore, it could be that the denial enabled by a tacit presumptuousness is like a white movie screen on which even doing God's work can be projected. How ironic it is, that sordid proprietary interest could operate not merely under the subterfuge of being a neutral "market-maker," but also as God's work. Such work is two degrees of freedom away from squalid greed. So it is remarkable that the two could become conflated in a mind.

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[i] John Arlidge, I’m doing ‘God’s work. Meet Mr. Goldman Sachs, The Sunday Times, 11/9/09.
[ii] Thomas Jefferson to John Taylor, Monticello, May 28, 1816, in Paul L. Ford, ed., The Writings of Thomas Jefferson (New York: G.P. Putnam’s Sons, 1892-99),  XI, 533.

In the month before the Oscars, Turner Classic Movies runs films under the promo, "Thirty One Days of Oscar."  Interestingly, in promoting this series, the network reminds views to watch the Oscars on another network.  Although the strategy could be that if people watch the Oscars, they will be more likely to watch TCM, it could also be that the people who operate TCM really do love movies and they are not bothered at all by viewers going to another network to view the Mecca of cinema: the Oscars. In other words, it could be that a passion for film trumps the incessant drive for more profit that typically occupies the attention of business managers. The culture of cinemateque may eclipse greed.  The implication is that business as usual--the typical rationale for going to work at a given business--can and should be questioned.  All of us can ask ourselves whether we feel the way about our respective industries the way ciinophiles feel about theirs. A way to test whether you are in the right field is if you find yourself saying, "I can't believe someone pays me to do this."  I suspect that few people can marvel at being in such a situation.  Even so, I contend that human nature relishes in it and dies in a sense without it.  That something so vital is so commonly relegated or dismissed in favor of expediency (or greed) is short-sighted, for he who does what he loves is apt to do it better than otherwise. We in the West at least are so used to businesses being constantly attuned to getting the next dollar or euro that it is surprising when the managers of a company put the interests of their passion above their own company's narrow interests. We ought not, in other words, to take business as usual for our default. Rather, we ought to look for creaks of passion particularly where it checks greed, even if just for special events, at the balcony.  If passion spreads such that we put things before ourselves, society would feel much different. I suspect that we have no idea how much, being locked in as though frozen in constant motion.

On curtailing greed, see: http://thewordenreport.blogspot.com/2011/02/godliness-greed-how-effective-is.html

In the wake of the financial crisis that came to a head in September of 2008, people might have been wondering if sufficient normative constraints on Wall Street greed are available, even possible. The ability of traders to create complex derivative securities that are difficult for regulators to regulate, much less understand, may have people looking for ethical or even religious constraints. It would be only natural to ask if such “soft” restraint mechanisms really do have the puissance to do the trick. Here’s the rub: the tricksters are typically the last to avail themselves of ethical or religious systems, and they the wrongdoers are the ones in need of the restraint. Blankfein said of his bank, Goldman Sachs, that it had been doing God’s work. About a week after saying that, he had to walk his statement back and admit that the bankers had does some things that were morally wrong. Although divine omnipotence is by definition not limited by human ethical systems, it is hard to imagine a divine decree telling bankers to tell their clients one thing (buy subprime mortgage derivatives) while taking the opposite position on the bank’s proprietary position (shorting the derivatives, beyond being a counterparty to clients). Divine duplicity seems to represent an oxymoron on a megascale rather than a justification for greed.

As the crisis erupted and was subsequently managed by public offiicals in government and new managers brought in to salvage AIG, I was researching the history of Christian thought on profit-seeking and wealth. I had found evidence of a gradual shift in the thought between Aquinas and the fifteenth-century Christian Humanists (mainly in what is now Italy). Whereas early Christian thought had tended to stress the negative attitude toward riches—the camel being in extreme pain in getting through the eye of the needle—in the Renaissance Christian theologians tended to argue that being wealth is necessary for a Christian to exercise the godly practical virtues of liberality and magnificance (particularly the latter, which alone permits gifts reflective of God’s majesty). Something had happened in the dominant Christian attitude on wealth that made the religion less of a buttress against greed because it had become possible for a Christian to be both rich and to go to heaven. Cosimo de Medici is a perfect example of a banker who was assured by the pope that a career based on urury would not necessarily bar a banker from entering heaven (assuming he gave financially to the Church). The various Reformers can be read as efforts to pull Christianity back from being so close to incorporating love of gain, or greed. I looked at the (Standard Oil) monopolist and devout Baptist, John D. Rockefeller, to get a sense of how efficacious the Reformation was in attempting to arrest and reverse the momentum of the pro-wealth Christian paradigm.

Having sketched the shift and subsequent reactions of the Reformers, I turned my attention to trying to explain both the shift itself and the efficacy of the Reformation. I believe the increasingly commercialized environment since the Commercial Revolution does not provide enough of an explanation; I contend that one must look at the religion itself to find the roots of the shift and the results of the Reformation as concerns the religion's theological attitudes toward wealth. In other words, Christianity itself must be examined. As you read through the book, you could do worse than ask yourself: is there something deeper in Christianity at work in the historical shift in thought on wealth and profit-seeking?  You will find my theory in the conclusion. Undoubtedly, you will develop your own as you reflect as you read.

The main question I want to pose through the treatise is whether religion itself, as a phenomenon touching the human domain of existence, can hold us back from ourselves even when we least want it to do so. If so, then a religion operating in the human domain can operate as a wholly-other mechanism by which sins such as greed can be reduced in force or perhaps even finally exterpated. To expunge the sordid stuff from our banks and corporations, human nature itself would have to be radically changed. Perhaps the question is whether it is possible even if not probable for religion operating through human beings to accomplish this task, given that religion cannot but interact with the world.

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Source: http://www.amazon.com/Godliness-Greed-Shifting-Christian-Thought/dp/0739139835/ref=sr_1_1?ie=UTF8&s=books&qid=1294957599&sr=8-1