Apple is doing it, why can’t we?
A recent Business Week article discussed the abusive CEO pay in America, and how the problem lies in the “agency” problems (“Agents exploit their role as intermediaries”). And who gets screwed the most? Shareholders. Here are some “pearls” to enrage you too:
“… Larry Ellison, CEO of Oracle, has gorged himself on more than $60 million in stock options every year since 2008. Even if Ellison did groundbreaking work and was a juggernaut of management brilliance, abusive would not be too strong a word…
… Apple’s new CEO, Tim Cook, may turn out to be every bit as good as Steve Jobs, or he may not. Apple’s board did not wait to find out. Cook got—for his very first year as CEO—a package worth $378 million….
…Consider that Philippe Dauman, the chief executive of Viacom, speared $84 million in 2010, and that Eugene Isenberg of Nabors Industries was awarded $100 million last year for agreeing to relinquish his job…
… In 2008, after promoting Vikram Pandit to CEO, Citigroup gave him $29 million in stock awards plus $8.4 million in options. Alas, the stock cratered. Compensating Pandit (but not, of course, the public shareholders) for this bad luck, Citi’s directors last year agreed to 500,000 more stock options and a $10 million stock award. These will reward Pandit for earning back the capital that, under his tenure, Citi had previously lost.
…From 2000 to 2010, shareholders lost 14 percent playing the S&P 500. But CEOs kept raking it in…
… Oracle paid its new president, Mark Hurd, in six different ways in 2011, totaling $78 million….
But the trophy for the most ridiculously managed company in America: Merrill Lynch (or should we say Bank of America?). You may ask why, and we will answer with a couple of quotes from this and this article:
“… Merrill Lynch’s newly recruited chief executive, John Thain, stands to share a $200m (£111.4m) payout with two senior lieutenants for less than a year’s work which culminated this week in the bank surrendering its 94-year-old independence.”
“In early 2008, just as Merrill Lynch CEO John Thain was preparing to slash expenses, cut thousands of jobs and exit businesses to fix the ailing securities firm, he was also spending company money on himself, senior people at the firm say.
According to documents reviewed by The Daily Beast, Thain spent $1.22 million of company money to refurbish his office at Merrill Lynch headquarters in lower Manhattan. The biggest piece of the spending spree: $800,000 to hire famed celebrity designer Michael Smith, who is currently redesigning the White House for the Obama family for just $100,000.
Big ticket items included $87,000 for an area rug, four pairs of curtains for $28,000, a pair of guest chairs for $87,000 and fabric for a “Roman Shade” for $11,000.”