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Inside
Info from The Graziadio $chool...
Do
an Internet search using the terms "executive compensation"
and "joke" and there are endless variations of...You
must be joking,
This is no joke, Who are these jokers? etc.
And
if something is so darn funny...
It belongs here in
The
Executive Compensation LOOP!
© 2002 by Jay
Badenhope, Used with permission.
Let's
start with the always amusing Chairman Greenspan..."Why
did corporate governance checks and balances that served us
reasonably well in the past break down? At root was the rapid
enlargement of stock market capitalizations in the latter
part of the 1990s that arguably engendered an outsized increase
in opportunities for avarice. An infectious greed seemed to
grip much of our business community."
And
you just thought your Loopmaster was jealous.
|
Lotta
Hay...
Former compensation consultant Graef Crystal observes
that Gap, Inc. CEO Millard Drexler, "has been given stock options
in dosages that would kill a horse." As of last year, these stock
options had a value of $685 million. (PayWatch)
Big
Bucks
The chief executives at 23 corporations under investigation for improper
accounting pocketed $1.4 billion, or an average of $62 million each,
in the last three years. Meanwhile, their companies' stock values
plunged $530 billion, or about 73 percent of their total value, and
their companies laid off a total of 162,000 workers. Those are key
findings in the ninth annual CEO compensation survey of large public
companies by United for a Fair Economy and the Institute for Policy
Studies. 'Pay for performance,' supposedly the guiding principle of
executive compensation in the 1990s, now lies in tattered shreds,
the report said. (Kansas
City Star)
"You're
No Walt Disney...or Roy either"
Did Michael Eisner, Walt Disney Co. CEO, really transform a dowdy
old company? Not if you consider that most
of the recent gain in Disney's stock value came about from raising
prices at the theme parks and releasing movies to video, things that
previous management proposed and would have been obvious to a first
year MBA student. Disney was turning away people from their theme
parks by 10am. When demand exceeds supply, the price is too low. With
the expansion of the video rental and sales market, Disney was sitting
on a gold mine of unreleased movies. Since that early success, how
has Disney stock outperformed the market? It was rumored that Eisner
wanted to close the animation division but was rebuffed by Roy Disney.
Left alone, the division had a number of hits. Was Eisner worth the
cost of his salary, bonuses and stock options? Not in my opinion.
(Conservative
Monitor)
Upstairs
Former Kmart CEO Charles Conaway received nearly $23 million in compensation
during his two-year tenure.
Downstairs
When Kmart filed for bankruptcy in 2002, 283 stores were closed and
22,000 employees
lost their jobs. Total severance pay: $0.
©
2002 by Clay Bennett, Used with permission.
Wrong
Numbers
According to PayWatch, a telephone line repairman would
have to work 1,891 years to equal Sprint Chairman and CEO William
Esrey's 2000 compensation - and would have to repair 6.9 million phones.
Sweet
Deal for Hershey CEO
Hershey
CEO Richard Lenny was paid more than $22 million last year in what
union activists say is a stark example of runaway CEO pay and the
double standard between compensation for CEOs and workers. An average
union worker at Hershey makes $18 per hour—about $37,440 a year. Lenny's
compensation could support 598 of these average Hershey workers. Hershey
employees went on strike earlier this year when management doubled
the cost of co-payments for health care. (PayWatch)
Atta
Boy Henry!
Cendant Corp.
CEO Henry voluntarily forfeited his annual stock option grant in 2002.
Cendant, a travel and real estate conglomerate, announced that Silverman's
compensation in
2002 will drop to about $15 million, down 58 percent from $36 million
the previous year. The company eliminated his right to
an annual stock option grant and more closely linked his overall pay
to the company’s earnings. (MSNBC)
And
You Too Christos!
Responding
to criticism from investors, Christos Cotsakos, the chief executive
of the E*Trade Group announced in May that he would forfeit about
$21 million of his pay from 2001 and accept no base salary for the
next two years. Cotsakos' 2001 compensation was about 35 times what
he received the previous year. (Business
2.0)
| The
Greedy Bunch!
(Fortune
Magazine)
Of the big companies whose stocks dropped 75% or more from their
boom-time peak, these are the ones where officers and directors
took out the most money via stock sales from January 1999 through
May 2002.
| Rank
|
Company
|
Total
Sold |
Top
Seller |
| 1 |
Qwest
Communications |
$2.26
billion |
Philip
Anschutz |
| 2 |
Broadcom
|
$2.08
billion |
Henry
Samueli |
| 3 |
AOL
Time Warner |
$1.79
billion |
Steve
Case |
| 4 |
Gateway
|
$1.27
billion |
Ted
Waitt |
| 5 |
Ariba
|
$1.24
billion |
Rob
DeSantis |
| 6 |
JDS
Uniphase |
$1.15
billion |
Kevin
Kalkhoven |
| 7 |
i2
Technologies |
$1.03
billion |
Sanjiv
Sidhu |
| 8 |
Sun
Microsystems |
$1.03
billion |
Bill
Joy |
| 9 |
Enron
|
$994
million |
Lou
Pai |
| 10 |
Global
Crossing |
$951
million |
Gary
Winnick |
|
Play
"Greed" the Game
The
Executive PayWatch Board Game takes the PayWatch visitor through
a story of what life is like for a millionaire CEO and a worker
struggling to make ends meet.
(AFL-CIO)
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