-Caveat Lector- >From http://www.nydailynews.com/front/story/32570p-30857c.html
New York Daily News - http://www.nydailynews.com No losses for biggest bosses By DOUGLAS FEIDEN DAILY NEWS STAFF WRITER Sunday, November 3rd, 2002 Merrill Lynch axed 17,400 employees and kept a stable of analysts who allegedly misled investors. The reward for CEO David Komansky: A $42 million payday - not to mention the $110 million-plus in options he has yet to cash out. Lucent Technologies pink-slipped 56,000 workers and posted a $17 billion loss in 2001. The payoff for Chairman Henry Schacht: A $22 million package. Citigroup canned 7,600 and became the focus of massive and ongoing conflict-of-interests investigations. No matter; Citigroup handed CEO Sanford Weill a $46 million bonanza - adding $360,000 for his use of planes, helicopters and limos. AT&T cut 10,100 jobs, lost $6.8 billion, watched its stock tank and bailed out of cable TV. That didn't stop it from giving CEO Michael Armstrong $21 million, plus sweeteners such as free financial consulting and rides on corporate jets. "They ought to take a huge cut in pay," said Graef (Bud) Crystal, an expert on executive pay. "Instead, they act like they just won Best in Show at the Westminster Kennel Club." Once the gold standards of American capitalism, these local companies were admired for nurturing cultures that fostered loyalty and integrity and fueled job growth. Not anymore. Along with dozens of other blue-chip firms, they cut staff, corners and standards during the past two years. As the stock market spiraled south - and profits, investor faith and corporate credibility crashed and burned - there was one item on the books that did not immolate: CEO compensation. The typical chief of a major U.S. corporation raked in an average $15.5 million in total pay last year, a nationwide survey found. That's 428 times the $36,250 in annual salary earned by the typical American worker, a disparity 10 times greater than it was in 1980. In the New York region, the average big-company CEO pulled down $26.6 million. And a Daily News analysis of proxy data and other financial filings for 20 metro-area firms found the overall pay for CEOs who axed 2,500 workers or more hit $31.2 million in 2001. That's 668 times the $46,700-a-year salary grossed by the average New Yorker. "It's a low point in American business history," said Denis Hughes, president of the 2.5 million-member New York State AFL-CIO. "It hurts workers, stockholders, consumers and corporations all at the same time." Is the boss worth it? You be the judge: CEO pay at 896 public companies examined by the AFL-CIO jumped 7% last year - as corporate profits at those firms plunged 35%. In a separate survey of 350 companies, Mercer Human Resource Consulting concluded that execs' paychecks dipped a negligible 0.9% as net corporate income sank 17.8%. A Pearl Meyer & Partners review of 200 firms found median total CEO compensation jumped 7%, or double the 3.4% raise won by the average worker last year. "You're supposed to pay for performance," said Charles El-son, director of the University of Delaware's Center for Corporate Governance. "Instead, a significant minority of American companies are paying for failure." Big city, big difference And nowhere is the gap between CEO pay and company performance greater than it is in New York. Nationally, 1.4 million workers got pink slips during the past 12 months, bringing the U.S. jobless rate to 5.9%. But in the city, 146,000 jobs were lost, driving unemployment to 7.9%. In other words, New York City, housing 2.8% of the nation's population, absorbed 10.4% of its job loss. And as New Yorkers hit the streets, fat cats hit the links. Literally. With no disclosure to shareholders, Lucent spent $45 million developing the Hamilton Farm Golf Club for its private use in New Jersey's Somerset County. How exclusive was the spread? Putting privileges went to just 180 corporate players. Meanwhile, the telephone-equipment maker imploded: It cut 56,000 jobs last year - 110,000 over three years - purging its workforce to 45,000. Market capitalization nosedived to $2.4 billion from a $163 billion peak in 2000, erasing $160.6 billion in wealth. And its stock bottomed out at 55 cents in September, down from a high of $76 in 1999. Last year, Lucent unloaded 36-hole Hamilton Farm, putting the ultimate corporate vanity project behind it. But the company could not halt its dizzying death dance, and as a penny stock (one that trades for less than $1), it faces possible delisting from the New York Stock Exchange. It's also under investigation by the Securities and Exchange Commission for alleged earnings manipulation. For his central role in the Lucent fiasco, Chairman Schacht was awarded $22 million in pay plus add-ons: financial counseling, $26,351; chauffeur services, $35,141; tax reimbursements on fringe benefits, $57,325, and life insurance premiums, $79,047. "A CEO ordering layoffs is like Dr. Strangelove blowing up Moscow from a safe distance," said executive-pay analyst Crystal. "You drop the bomb and you don't feel any heat. In fact, you get rewarded for it." Backlash But disgust with outsize pay, unaccountable corporate culture and contempt for workers - the legacy of Enron, Tyco, WorldCom, Adelphia, ImClone, Qwest, Sunbeam, Global Crossing and Arthur Andersen - is on the rise. Four of the nation's biggest stock market investors - with $1.3 trillion in assets under management - told The News they are stepping up efforts to link wages to performance. Leading the charge is the California Public Employees' Retirement System, which leverages its $135 billion nest egg to crusade for corporate reform. "Outlandish CEO compensation has become a critical issue for us and will be the focus of our proxy filings," said CALPERS spokesman Brad Pacheco. New York City's four main pension funds, which control $95 billion, are drafting shareholder resolutions calling for performance-based pay. TIAA-CREF, a teacher's pension fund with $265 billion under investment, is also demanding tough performance standards in private sessions with big firms. And trustees at Fidelity Investments, the mutual-fund giant, which manages assets of $776 billion, are considering new guidelines to curb excessive pay awards. Reformers might begin with two homebred giants: Merrill Lynch, the nation's largest brokerage house, fired 25% of its workforce - 17,400 people - and saw its profits sink 85% in 2001. Accused by state Attorney General Eliot Spitzer of tainting research to win underwriting business, it allegedly duped investors by publicly touting stocks in firms its analysts privately disparaged. It paid a $100 million civil fine to settle charges without admitting wrongdoing. Separately, a Senate subcommittee accused the firm of helping mask Enron's shaky finances, a relationship that's under federal investigation. It all happened on CEO Komansky's watch, yet he bagged a $42 million pay package. It breaks down like this: Base salary, $700,000; cash bonus, $1 million; restricted stock granted, $4.1 million; "special restricted stock" granted, $6.4 million; stock options granted, $4.1 million, options exercised, $25.7 million. Komansky has another $112 million in unexercised stock options from prior years. That amount alone will cost stockholders 12% more than Merrill's payment to Spitzer. Citigroup, the nation's No.1 bank and one of the world's largest financial services firms, dropped 7,600 workers and saw its profits, stock price and integrity battered. Under a probe by Spitzer and the SEC, its Salomon Smith Barney unit allegedly allocated shares of hot initial public offerings to execs who made millions within days, in return for lucrative investment banking business. In addition, axed Salomon star analyst Jack Grubman allegedly pumped up stock ratings for ailing clients, including AT&T, on whose board Citi CEO Weill sits. Charges of complicity And then there's Enron. "Citi knew what Enron was doing, assisted in the deception and profited from their actions," a congressional committee said in September. Manhattan District Attorney Robert Morgenthau and the U.S. Justice Department are examining whether Citigroup knowingly structured $4.8 billion in deals to help Enron disguise debts and hit selected numbers. As its iconic CEO, Weill personifies the modern Citi, and his $46.3 million paycheck is part of the formula. Here's how it adds up: Base salary, $1 million; cash bonus, $17 million; "other annual compensation," $683,684; restricted stock awards, $8 million; stock granted, $3.6 million, stock options exercised, $16 million. Yet to be collected is another $40.7 million in unexercised options from past years - an amount that, by itself, would give Sandy Weill 871.5 times the annual wages of the average New Yorker who works for a living. With research assistance from Ellen Locker ~~~~~~~~~~~~~~~ A<>E<>R + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + Forwarded as information only; I don't believe everything I read or send (but that doesn't stop me from considering it; obviously SOMEBODY thinks it's important) + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + In accordance with Title 17 U.S.C. section 107, this material is distributed without charge or profit to those who have expressed a prior interest in receiving this type of information for non-profit research and educational purposes only. + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + "Always do sober what you said you'd do drunk. That will teach you to keep your mouth shut." --- Ernest Hemingway <A HREF="http://www.ctrl.org/">www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance—not soap-boxing—please! These are sordid matters and 'conspiracy theory'—with its many half-truths, mis- directions and outright frauds—is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRLgives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credence to Holocaust denial and nazi's need not apply. Let us please be civil and as always, Caveat Lector. ======================================================================== Archives Available at: http://peach.ease.lsoft.com/archives/ctrl.html <A HREF="http://peach.ease.lsoft.com/archives/ctrl.html">Archives of [EMAIL PROTECTED]</A> http://archive.jab.org/ctrl@;listserv.aol.com/ <A HREF="http://archive.jab.org/ctrl@;listserv.aol.com/">ctrl</A> ======================================================================== To subscribe to Conspiracy Theory Research List[CTRL] send email: SUBSCRIBE CTRL [to:] [EMAIL PROTECTED] To UNsubscribe to Conspiracy Theory Research List[CTRL] send email: SIGNOFF CTRL [to:] [EMAIL PROTECTED] Om