Who Is the Corporation?

I have been writing about Atria Senior Living, owned by a "Lazard-affiliate." Atria is big a chain of facilities where elderly people live. It offers assisted living care and "memory care"(which means Alzheimer's care facilities). Lazard is a big "Bermuda-based" (HA!) Wall Street "buyout firm."

Here's the deal. Big Wall Street firm Lazard buys a few senior-care facility chains and combines them into Atria. The "boomers" are aging and will need care so this is the Next Big Thing investment. Pension funds and others hand over to Lazard millions for this "investment," expecting Lazard to provide a rich return. This means the seniors (well, their incomes, actually) are the PRODUCT, not the customer here. The seniors are an annoyance, inefficient, demanding, in the way of maximizing revenue. Employees are even worse, of course, because they expect to get paid, and want to go home sometimes, and are generally in the way of the supreme goal of maximizing revenue.

And to complicate things Lazard has set up an extremely convoluted system of corporations "affiliated with" other corporations, some based in Bermuda (HA!) and none particularly traceable to being the actual owners of Atria. No one can really find who ultimately can be held accountable for the hundreds of violations of regulations that Atria commits.

So here is the thing. When you talk about a corporation doing something, who are you talking about? In reality you are talking about a few PEOPLE, not some anonymous corporation, PEOPLE. And when you talk about the people of a corporation you are not talking about Bob in Sales or Mary in Accounts Receivable. They are not the people who make decisions -- they aren't even asked. They are told from the top how it is going to be. When you talj about a corporation doing or saying something you are really talking about A FEW PEOPLE and the things these people do and say are not for "the company" they are necessarily for THEMSELVES. Corporations do not have voices or thoughts or ideas, a few people who have control of the resources of the corporation do, and always, always act for their OWN gain.

So who are we talking about today? Bruce Wasserstein is the guy at the top of this particular corporate food chain, reeling in the BIG bucks, and the residents of Atria are working to hold him accountable.

Saturday's New York Daily News had a story about this: Care-home grannies blast billionaire whose firm put their rents through roof

. . . a sneaker-clad foursome of seniors - representing numerous residents they say are too scared to come forward - recently tried to confront the ultrawealthy investment banker at his Rockefeller Center office.

. . . In a letter from the residents' board they tried to hand-deliver to Wasserstein, the women noted the stark disparity between his wealth and their fixed incomes.

"While residents at Atria struggle to manage rate increases ... the compensation packages for those at Lazard are in the millions."

Wasserstein lives in a duplex that combines the 10th and 11th stories of a posh Fifth Ave. building on the upper East Side. He also owns a Paris pied-à-terre, a sprawling East Hampton estate next door to Jerry Seinfeld and a Santa Barbara, Calif., spread worth $8.3million.

Lazard's board paid Wasserstein, who is worth at least $2 billion, more than $41million in salary and bonuses last year.

Atria is owned by a fund controlled by Lazard, although Lazard claims Wasserstein has no control over Atria's operations.

"Lazard" claims that Lazard has no control over Atria, which is owned and operated by Lazard. Meanwhile those elderly people are squeezed by writing ever-greater checks, and the employees have to get squeezed and squeezed. Everyone is squeezed, Wasserstein gets ever-richer, and NO ONE can be held accountable.

Nice system we got going here, huh? Works for Wasserstein. But not for the rest of us.

This post was sponsored in part by The Campaign To Improve Assisted Living.

Follow Dave Johnson on Twitter: www.twitter.com/dcjohnson

Comments

[Henry]

How is your ownership of a share of Exxon Mobil different than your ownership of the oil they drill for off the Gulf Coast? In the former you have an abstract slice of equity financing and in the latter you have a 1/300 million slice (your vote) in the song by Woody Guthrie (this land is your land...)

[hopeless277]

It's called 'canabalistic capitalism'. It eats it's own customers and will eventually starve after they have all been eaten. Do not worry though, I'm sure Bush/Cheney have humane deaths planned for all those seniors in trouble. You don't really think all those big ovens at the Halliburton internment camps are to cook McCains barbarque, do you?

[avraamjack]

.
Perhaps this is also an opportunity for those who can provide these services at less expense and with higher quslity?
.

[BeeOplentee]

Sounds like Wasserstein needs the Mussolini treatment perhaps.

[DickTater]

I like to think of Corporations like Voltron.

A huge machine made up sometimes of smaller machines. Inside certain key cockpits sits a human. But if the human dies, another can take his place....the huge machine lives on. Perhaps many lives of men, perhaps forever.

The Corporation/Machine then has powers that no human can achieve....near immortality. Plus as a corporation, you can endlessly accrue lands, factories, subdivisions, hospitals, homes, real estate, investment returns, interest.....on and on almost endlessly. The rest of us fool mortals can only count our earning lives in decades, money can only pile up so high and gain interest for a limited number of years.

Corporations are like huge juggernauts on our landscape.­...crushin­g people with every step they take and every time they turn around or site down. They don't eat, they don't sleep. You cannot appeal to their pity or sense of Right/Wrong....they have none. Their needs are not human needs. They are nourished by things humans do not necessarily value. Corporations are a fairly new invention and started as small, state-chartered interests which were meant to be temporary (long enough to finish a railroad or bridge or reservoir).

Instead, the rich folks saw this as a vehicle to live forever, get rich forever, and to be greater than human. Of course they jumped at it, and now these titanic corporations stalk our globe....paving, mowing, reaping, eating, defecating, and basically curb&guttering the whole damn place. StopTHem!

[BeeOplentee]

They are also paying you, providing your food and ability to travel hither and yon. If you own a small business you rely on the paychecks of your customers. Without corporations there would be no industries, and with out industries we'd be back to the world of the 1820s.

[DickTater]

And what is wrong with that? Better than no world. Better than this one.
You've got it backward, acting like corporations make the wealth we all enjoy. They make their money off us, and increasingly it's by cradle-to-grave FARMING us.

[dissolvethecorporation]

If you talk to these fat-cats, they will describe themselves as 'the top of the food chain.' Of course, it was their hard work and business acumen that put them on top, not the families they were born into. The rest of us 'whiners' deserve what we get. After all, a free-market system allows the cream to float to the top. (Unless you are a hedge fund or REIT investor, then you deserve to be bailed out.)