CIBC’s board shares blame

Re: Decision Time On CIBC Bonuses, Keith Kalawsky, Sept. 7 Keith Kalawsky and the loudest Bay Street analyst on the point of whether CIBC bonuses should be paid this year — Roger Wessel of National Bank — are missing the point.

The board of directors ought to pay the price ( symbolic as it is) with resignations — and not employees, who had nothing to do with the sorry Enron chapter. CIBC is not insolvent or financially distressed. Employee shareholders have paid a steep price, along with other shareholders, for the Enron fallout, through a hit to the share price.

Not paying people bonuses throughout the organization to speed up capital rebuilding will do little but reduce morale and, yes, cause defections. That will damage the firm’s ability to attract top talent in the future and reduce its competitiveness.

Heads have rolled on the Enron matter at the employee level. Where they haven’t rolled, and where attention ought to be focused, is at the board level. Did the board not sign off on the strategy proposed by senior management to do whatever it took to ensure any senior management involved with Enron did not have to face a jury in Houston?

This led to a hapless and incompetent negotiation process with U.S. regulatory authorities, a too-quick and broad acceptance of certain “facts” related to the matter and the massive settlement. Why shareholders should ever have been asked to bail out certain officers by the board is a mystery, and certainly wasn’t a course followed by Merrill Lynch, for example. Asking employees to pay twice for a poor board decision is getting it assbackwards.

Softwood solution

Re: Softhead Lumber, Terence Corcoran, Sept. 15 Excellent piece today, hitting the nail square on the head. This is an industry harking back to the hewers-of-wood, drawers- of- water days and, as Herbert Grubel’s piece points out (“ The Roots of Wrath,” Sept. 15), we continue to subsidize it and complain indignantly when called on it. While the U.S. government’s craven cave-ins to the lumber lobby are egregious, the solution does not lie in the kind of histrionics we get from our political elite.

If nothing else, the various panel decisions have laid the basis for a negotiated solution: the United States has to accept, as panels have made clear, that the injury case is without foundation, while Canada has to accept that it subsidizes.

A clear set of rules laying out what are and are not acceptable practices and a U. S. commitment to lay off when the provinces adhere to these rules is not beyond the capacity of both governments to negotiate. Michael Hart, Simon Reisman Chair in Trade Policy, Carleton University, Ottawa

Mental illness

Re: A Big Business Disability, Marilyn Linton, Sept. 14: It seems to me that in the last six months, more than ever before, the media has been covering the effects of mental illness in the workplace, and its effects on productivity.

As a member of the work force who has been diagnosed with depression, I was pleased to read, in Marilyn Linton’s article, LifeWorks Services’ Estelle Morrison giving reasonable suggestions for dealing with depression in the workplace — especially flex-time and employee assistance programs. However, the simple title of the article, “ A Big Business Disability,” clearly illustrates what the media’s focus has been when reporting on mental illness in the workplace — the employer’s loss of productivity and absenteeism.

Why doesn’t the media report on the employees’ concerns over mental illness in the workplace, such as: the likelihood of facing discrimination and stigma in the workplace; being treated differently by your co- workers and employer; being afraid that information you have disclosed will not be kept confidential; or being afraid of lost wages or even possible termination?

Oil depletion

Re: Freak Oil Theory, Peter Foster, Sept. 7 Mr. Foster claims: “Supply doomsters go under the collective banner of ‘ peak oil’ theory.” However, almost no geologist or scientist would dispute the data that a peak in global oil extraction will happen. That part of the “peak oil” argument is over.

The question is when will the peak in extraction occur, what is the depletion rate post-peak, and what will be the economic impacts. Suggesting that only doomsters think a peak in global oil extraction will occur is lying to your readers about the scientific consensus. Markets don’t create oil. Markets control the price of oil. Kyle Bennett, PhD candidate in ecology and evolution, Rutgers University, New Brunswick, N. J. Peter Foster’s usual knowledgeable analysis was sorely lacking in his comments on oil pricing. He denigrates the proponents of “peak oil” theory such as Colin Campbell and Matthew Simmons without understanding their position.

The “peak oil” argument states that we are at, or very close to, peak conventional oil production. “Conventional” can be defined as oil produced by flowing or pumping without exotic means. As this source dwindles, unconventional oil will be produced by such means as carbon dioxide flooding (e.g. Weyburn), steam injection (Cold Lake) and mining (Syncrude and Suncor).

Just as we no longer mine native copper (this resource has been exhausted), the day approaches when we will no longer get most of our crude oil from conventional sources. Price volatility will be the norm as we conserve, switch, and develop unconventional sources.

The Rankin case

Re: OSC seeks jail time for tipper, Shannon Kari, Sept. 10: As a former lawyer, I am appalled on a number of levels in regard to the Andrew Rankin case. He was unequivocally cleared of all insider-trading charges, but convicted of tipping, considered a lesser offence. Now the Ontario Securities Commission wants to flex its political and legal muscle to make an example of Rankin by seeking jail time — when the most egregious case of insider trading netted six months.

The OSC needs Rankin as a scapegoat for its own negligence when they allowed the “real criminal,” the insider trader himself, Dan Duic, to walk away with over $3-million in profit.

The OSC is playing dirty — presenting new information to the court only one day before sentencing. The judge described this behaviour as “abhorrent and unprofessional.”

They also tried to present an “expert” witness to connect tipping and insider trading, a “hijacking” in the words of the judge. Remember, Rankin was cleared of insider trading. This is like trying to give someone a murder sentence for manslaughter. It is just not right. Nicholas Brinckman, Toronto.