Stockholders of publicly traded companies, as well as the general public, have recently become outraged with executive compensation and their hefty bonuses, especially in light of the mounting losses at some companies. It seems that no matter what happens or what they do, executives somehow always win. They win big during their employment, and sometimes even more as they retire. With all that money, you'd think that haggling over some perks in their package would be beneath them . . . but it isn't.The recent outrageous perk award goes to Continental Airlines (NYSE: CAL) CFO Jeffrey Misner who asked for and was granted a free lifetime parking spot at Jacksonville International Airport. As long as the 54-year-old retiree lives within 200 miles of Jacksonville Airport, and providing Continental has operations at the airport, Misner will have a free parking place. Of course, that's just a perk that goes with a $2,997,000 retirement pay.
At the beginning of the year, many were shocked to hear that Countrywide Financial Corp. -- the poster child of the subprime mortgage meltdown, which has been bought by Bank of America (NYSE: BAC) -- CEO Angelo Mozilo was going to receive a $36.4 million cash severance payments, $400,000 per year for consulting services, and perks including the use of a private airplane. He walked away from most of these after a public outcry. Don't feel bad though, he still left with at least $23.8 million.
It just doesn't cease to amaze me how some people have the nerve to ask for certain perks in addition to their very fine salaries and severance pays. Here are some more examples:
- Hanmi Financial (NASDAQ: HAFC) President and CEO Dr. Sung Won Sohn requested and got a 2005 Mercedes Benz 430S, as well as the transfer of his membership to the Wilshire Country Club and the Jonathan Club. This was in addition to his $1,298,000 lump sum retirement pay.
- 24/7 Real Media (which was acquired by WPP (NASDAQ: WPPGY) last year) executive Christopher J. Wagner had in his severance agreement two round-trip plane tickets between the United States and Switzerland. He also asked for his used NEC computer and his existing mobile phone. Plane tickets? A used computer? A phone? Would you ever dream of asking for these when "retiring?" And don't forget, that's in addition to retirement pay and stock options.
- Mannatech (NASDAQ: MTEX) agreed to give its retiring chief legal officer -- apparently at her request -- her office furniture. Was she planning to open a home office? Was she emotionally attached to "the executive desk, executive chair and two side chairs" specifically mentioned in the filing? She also got the company car. Of course, that was beside the $10,000 a month compensation she received for consulting for a year after the retirement.
- Syniverse (NYSE: SVR) chairman and CEO G. Edward Evans stepped down from the role of CEO but stayed as chairman until the end of the year. His sweet deal? He continued to receive the same salary, despite the company paying another CEO already. Evans also asked to have the company plane, but at least in this case, he agreed to either assume the lease on the plane or buy it outright. Of course, I doubt he would be paying full price, but, hey, it's something.
In 2006, the SEC voted to change disclosure rules. It doesn't mean executives received fewer benefits, it just means that at least shareholders and the public know about them.
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Reader Comments (Page 2 of 2)
7-26-2008 @ 10:29AM
S Garey said...
This is so laughable. You people who side with the CEO's making millions while America goes down the drain must be completely insane. You people must be just as greedy, heartless and self-serving as the CEO's. And blaming Bush IS proper in this instance. He is supposed to be working for our benefit, and he has spent eight years ignoring the American people and the economy, while he lets his rich buddies have free reign. How can you back these failed policies? DUH!!!
7-26-2008 @ 10:37AM
robert russell said...
Look at the perks Congress gets and some of these people have been in office for decades. Ear marks should be against the law, one ear mark was 5million to Belgem for a museum now if that dont get your dander up nothing will. These people are our CEOs. ( vote these bums out get new thinking in)
7-26-2008 @ 10:39AM
dino said...
We all complain (legitimately), but the cycle continues. How do we change this? Is there any way to get this outrageous cycle to stop?
7-26-2008 @ 10:46AM
JERRY said...
You people are just silly. Why are you going after these people? They worked, did really well, and got paid. Welcome to America! You could been one of these people, but you choose to just whine...What a bunch of losers you all are.
7-26-2008 @ 10:44AM
Truthteller said...
He asked for his used computer because the hard drive is holding compromising data on what he was doing at work: online porn, kiddie porn, or perhaps some skimming off.
7-26-2008 @ 10:48AM
JERRY said...
You people are just silly. Why are you going after these people? They worked, did really well, and got paid. Welcome to America! You could be one of these people, but you choose to just whine...What a bunch of losers you all are.
7-26-2008 @ 10:50AM
Ted said...
The hourly worker has no say what so ever about their pay and benefits and that same situation should be placed on managers at all levels. If the lowest guy on pole has to pay for his benefits then the CEO and Board members should too.
7-27-2008 @ 1:16AM
david groomes said...
The solution to this is for consumers to start buying as many goods and services as they can from smaller companies. Consumers also have to fill out as many opinion cards for the big companies letting them know why they are switching to smaller companies. In the beginning consumers will pay a little more, but reduced profits will cause the big companies through “free market competition“ to reduce where possible. At first they will cut employees, who can go work for the smaller companies that are getting more consumer income. Then as the size of the big company shrinks and the marketing component of the company starts passing on the opinion information, then excessive executive overhead will start to come down. Finally as the difference in size of companies from largest to smallest comes down and compensation differences between executives and labor comes down similar to smaller companies then true competition will occur which should lower prices for all of us. Along with these actions consumers need to pay attentions to which companies are out sourcing labor vs. using in country labor and try to avoid those companies. I wonder if we can out source executives. Anyway back to reality. For this solution to work consumers have to become more willing to choose alternate sources of a product and provide feed back. Then maybe corporate America will learn that “We work to live not live to work”.
7-26-2008 @ 11:45AM
Rick said...
Why is the wrong people are assassinated or die from cancer?
7-26-2008 @ 12:20PM
robert russell said...
OK people our congress just bailed out fany may or what ever the bank was for 250 billion bucks,this was a privatly owned bank,some of our smale banks are going under,dont see congress bailing them out. Passenger plane companes going broke,chane stores going broke. Something a little fishy here just maby some of our elected people had stock in the bank in LA ( Do you think our elected people would do that,shame on me fore thinking like that)
7-26-2008 @ 12:26PM
Stevie Ray said...
I work for AT&T. This is how it works at my company. The CEO and board of directors hold the majority of the stock. Therefore; whatever they vote on wins! And by the way, they set their own wages, percs, and retirement.