Fw: The Great American CEO Scam

[Guest guest]

Sickening, sickening, sickening. Beneath this normally gentle demeanor, I

am a rebel type!

Patty

----- Original Message -----

From: " ilena rose " <ilena@...>

<Recipient List Suppressed:>

Sent: Thursday, January 24, 2002 9:37 PM

Subject: The Great American CEO Scam

>

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2002/01/20

/IN7

> 9389.DTL

>

> The Great American CEO Scam

>

> Joan

> Sunday, January 20, 2002

>

>

> ------------------------------------------------------------------------

>

> I'm a card-carrying capitalist, having cut my teeth on Ayn Rand as a

> teenager. I believe in a competitive meritocracy. Whenever a colleague

> complains that a fellow worker is overpaid, I say people are worth

whatever

> someone is willing to pay them.

>

> Except, I now add, when it comes to CEOs.

>

> The compensation of CEOs has become so obscene that workers ought to be

> storming corporate offices like French revolutionaries on King Louis XVI's

> palace. Waves of layoffs are sweeping the country, yet CEOs are pushing

> their boards of directors for once-unthinkable financial packages. Enron

> isn't the only company that sacrificed its employees while the executives

> cashed out.

>

> Earlier this month, Ford Motor Co. announced it was laying off 35,000

> workers worldwide and closing five North American factories after a

> disastrous 2001. The man who presided over this mess is a fellow named

> Jacques Nasser.

>

> He was CEO for 34 months. It was on his watch that the company's revenues

> plummeted and prompted Ford to destroy the livelihoods of thousands of

> employees and gut entire towns that relied on Ford for employment and tax

> revenue.

>

> Nasser was pressured to resign, which he did on Oct. 30. Yet Ford's board

> of directors agreed to award him the same compensation he would have

earned

> had he remained CEO through the end of the year and met all his

performance

> goals. This included 617,000 " performance stock rights, " worth about $9

> million in today's market.

>

> The exact amount of Nasser's compensation for 2001 won't be disclosed

until

> spring, but his 2000 package gives us a hint. He received 349,640

> restricted stock units that year, which he can convert to about $5 million

> in cash 18 months after his retirement. He also earned a base salary of

> $1.6 million and a bonus of $7.7 million.

>

> While Ford directors made sure their failed CEO would enjoy an extravagant

> retirement, the company announced it was suspending matching 401(k)

> contributions for employees and raising health insurance premiums next

> year. Ford also eliminated merit raises for about 2,200 top-level

managers.

>

> Ford has broken no new ground here. In 2000, Disney laid off 4,000 workers

> while its CEO, Eisner, earned $72.8 million. Cisco laid off 8,500

> workers in 2000 while the boss, Chambers, got a 40 percent pay

> increase to $28.7 million. Bernard Ebbers, CEO of WorldCom, laid off 6,000

> workers while persuading his board to give him a $10 million bonus.

>

> Top executives themselves admit the system is out of whack when CEOs make

> 571 times the average worker's wage. " CEOs get paid, " one executive told

> Fortune magazine, " according to a system that scorns objectivity and

market

> forces. "

>

> Not to mention workers.

>

> The average auto worker made $17.54 an hour in 1990. In 2000, he made $24.

> 06, an increase of 37 percent. The average New York teacher's salary went

> up 20 percent during the decade, the minimum wage 36 percent.

>

> The average CEO of a major corporation? His pay went up 442 percent during

> the '90s to $13.1 million. But CEOs who announced layoffs of 1,000 or more

> workers in 2000 earned more: They averaged $23.7 million in total

> compensation.

>

> Meanwhile, the guy who cleans the offices is holding down two jobs to pay

> the rent. The middle-manager works overtime to earn enough for her

> daughter's tuition. The workers laid off in the latest restructurings are

> hustling for jobs that no longer exist, tapping their retirement savings

> for groceries and gas, taking work busing tables or hauling other people's

> garbage.

>

> You wonder why workers don't rise up against the rapacious, limousine-

> driven, custom-suited, Gulfstream-flying executives who toss them away

like

> printer cartridges. I imagine someday they will revolt, as soon as they

can

> find the time.

>

>