Friday, August 01, 2003

The Poor Dears…How Ever Will They Manage?

In a recent Business Week article by Louis Lavelle on the plummeting salaries of CEO's we learn of the tragic plight of Edward W. Barnholt, CEO of Agilent Technologies Inc. It seems that his company's sales in 2002 were down 28%, the stock was off 35%, and the company posted a $1 billion dollar loss.

"So when it came time for the board to decide Barnholt's pay, he paid dearly, with a 10% cut in his base salary, to $925,000, and no bonus or restricted-stock grant for the second consecutive year!"

Can you imagine the indignity of it? I can just imagine poor Ed calling home and telling the wife that it's Spam and potatoes on the table tonight. And while she's at it, call the cable company and have the service discontinued. After all, how is one to scrape by on less than a million a year? I shudder to think.

But, Barnholt is not the only one suffering:

"Of course, averages can be deceptive. What has really been wrung out of the system is the excess at the very top of the scale. In last year's ranking, Oracle Corp CEO Lawrence J. Ellison set a record with a $706.1 million payday after he exercised a big stash of options. This year, the highest-paid exec clocked in at just $194.9 million. Last year, the top seven execs on our pay scoreboard broke the $100 million barrier; this year, only two did. The numbers were also skewed by a handful of CEOs who, in light of weak performance and a backlash against obscene pay, elected to work for nominal sums or who gave back part of their take. So while average exec pay plunged by a third, the median pay for our 365 CEOs actually rose by 5.9%, to $3.7 million. Yes, it's an increase, but not to a level that's apt to provoke investor outrage."

I know the more mean-spirited among you think a mere $195 million is enough for anyone, but have you considered the shattered egos of these now disadvantaged men? While meeting at the country club they can no longer brag their salaries are larger than the GNP's of several African countries. Surely, they must feel they have to hide their faces for the shame of it!

Another pernicious trend has been the "pay for performance" demands of the stockholders. This outrageous scheme actually wants Chief Executive Officers to be held accountable for the well-being of the companies they are in charge of! What are these people? Communists? Only the heartless could not be appalled by wretched behavior that follows:

"Although Apple Computer Inc. CEO Steven P. Jobs earns a salary of just $1 a year, he did get quite a bonus when the Apple board agreed on Mar. 19 to exchange 27.5 million of his underwater options for 5 million shares of restricted stock worth $72 million -- in effect rewarding him for the 80% slide in Apple shares over the past three years."

How long can we stand by and watch what amounts to a national disgrace? I, for one, think that if we are to call ourselves a compassionate country and concerned with the welfare of all individuals, we must petition Congress to give the wealthiest one percent among us drastic and immediate tax cuts and generous incentives to restore the prestige and dignity of these shattered men.


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