A change of perspective: Attending an Institute of Internal Auditors conference

On April 19, 2011, I attended a conference hosted by The Institute of Internal Auditors. The keynote speaker was former CFO of Health South and author of, HealthSouth: The Wagon to Disaster, Aaron Beam. My intentions of going to this conference were purely to meet companies for potential internships, and to enjoy the free meal. I wouldn’t be taking home with me the very things that I sought to receive from this event. I would take with me much more.

Aaron Beam shared his entire career life to us; the good, the bad, and the ugly. He first started his career by meeting someone who made the biggest impact in his life, Richard Scrushy. Richard Scrushy approached Aaron with a proposition that seemed to good to be true. Scrushy put on the table an offer to invest in a startup company named HealthSouth.

We live in a world today where a lot of the surgeries performed are outpatient surgeries. Back in the 1980’s, when HealthSouth was formed, outpatient surgery was a thing of the future. Rehabilitation centers were in the hospitals themselves which meant that you lived in the hospital the whole time you recovered. Scrushy had the brilliant idea of letting patients recover outside of the hospital doors and into a gym-like setting. Patients would come to HealthSouth to regain strength and get back to living the life they used to live as much as possible. Once HealthSouth was formed, more and more outpatients would come walking in the doors of HealthSouth to avoid the pricey hospital bills.

Back to Beam’s part of the contribution. Scrushy offered Beam to purchase stock at $0.05 a share when bigger companies were buying stock at $1.00 per share.  After consulting with Beam’s wife, they agreed to purchase one million shares which totaled a $50,000 contribution. Before Aaron Beam could blink, he was on the road to becoming a millionaire. However, the one person that helped him become a millionaire would soon pressure him into something that would put his career on the line.

Aaron Beam was not only an investor of HealthSouth, but he was appointed CFO of HealthSouth as well. The company was doing well from the very beginning. The financial statements were positive and looking up.

As for every company, it is nearly impossible to keep a steady incline of the share price without declining for a quarter or two. The same was about to happen to HealthSouth. Scrushy was a firm believer of doing whatever it takes to make the company look good, even if it meant deceiving people. So one day, Aaron approached Scrushy and told him that the company was not going to make the target for the quarter. Scrushy did not like this one bit. Scrushy told Aaron to do what he had to, to make sure that the company hit its target. Aaron didn’t like this one bit, but he knew his job was on the line. So he went into the general ledger and began debiting cash and crediting assets. This solved the temporary problem but would soon cause a bigger problem down the road.

Quarter after quarter Aaron was cooking the books, making his company look bigger than life. The stock price was now at $10.00 a share. Aaron was not only a millionaire but he was a multimillionaire. If I wasn’t a firm believer of “money is the root of all evil” before this conference, then this conference definitely made me look differently at money. Before Aaron knew it, he fell into depression. Rather than looking forward to going to work, he looked forward to sitting in his chair after work, drinking himself into depression. He could no longer sleep at night because he knew what he was doing was wrong. His relationship with his wife was no longer a positive relationship. He began to realize where his path was leading and he knew he had to change something about it. He sold his stock in the company and told Scrushy that he was retiring at the age of 57. Scrushy was not happy about this decision but he understood.

While this is not the end of his story, this is as much as I want to tell in hopes that you will read his book and figure out yourself what happened to him. It is not what happened to him that fascinates me, it’s the greed of humans and the mentality that people are never happy with what they have. For some reason we always need to have more. Our homes have an infinite amount of space that we need to fill, and we figure that we won’t be happy until we fill all of the space with useless toys.

We spend our whole lives trying to fill a space that is infinite, just to achieve happiness.

Aaron Beam is a living testimony that just because you have a couple million dollars doesn’t mean that you have achieved happiness. In fact, it seems like it is quite the opposite. The more money someone has, the more depressed they are. My hope is that we wouldn’t do things for the money, but that we would do things in order to achieve happiness. For we have learned that money doesn’t equal happiness, so what does? That is a quest you must set out to seek. Just make sure that your quest doesn’t involve making “x” amount of dollars, but involving a purpose in life.

Kyle Labeaune
Accounting Major
Vanguard University