AFL-CIO Unveils 'Jaw-Dropping' Case Studies of CEO Pay

[katty]

AFL-CIO Unveils 'Jaw-Dropping' Case Studies of CEO Pay
and Rigged Deals in New Executive Paywatch Website
By AFL-CIO

Tuesday 12 April 2005

Launches campaign to curb runaway CEO pay www.paywatch.org.
Excessive CEO pay enriches corporate executives at the expense of working families' retirement savings, according to the new Executive Paywatch website, unveiled by the AFL-CIO today. As part of a growing movement to reform executive pay, the website provides case studies on companies that rewarded CEOs with huge pay packages last year. It gives visitors tools to pressure companies to reform out of control CEO pay.

According to the New York Times, average CEO pay increased 12 percent in 2004 while the pay of average workers increased just 3.6 percent. Last year, the average CEO of a major corporation received $9.84 million in total compensation.

"We have seen a tremendous amount of interest among workers in holding CEOs and their boards accountable," said AFL-CIO Secretary-Treasurer Richard Trumka. "They are rightfully outraged when they learn about jaw-dropping executive compensation packages. It's time to put the brakes on runaway CEO pay."

This year, union-sponsored pension plans have submitted over 140 shareholder resolutions on CEO pay reform. The shareholder proposals include limiting golden parachutes, demanding pay clawbacks, expensing stock options and seeking shareholder approval of preferential executive pensions. These new shareholder proposals will accelerate the advances made last year, when an unprecedented 34 union fund-sponsored proposals on CEO pay won majority votes.

"The AFL-CIO looks out for the retirement savings of working families, which means we can't look away while CEOs run off with outrageous pay packages," said Trumka.

The paywatch website includes new case studies of excessive CEO pay for the following companies: Amgen (NASDAQ:AMGN) , Coca-Cola (NYSE:KO) , Dynegy (NYSE:DYN) , Sprint (NYSE:FON) , Sempra Energy (NYSE:SRE) , and Wal-Mart Stores (NYSE:WMT) . The case studies dissect the CEO pay packages and link to the union fund-sponsored shareholder proposal at each company.

At Wal-Mart, for example, President and CEO H. Lee Scott raked in nearly $23 million in total compensation in 2004. Most of that compensation was in the form of fixed price stock options and time-vesting restricted stock. At the company's annual meeting in June, shareholders will be asked to vote on a proposal urging the Board of Directors to grant Wal-Mart executives performance shares instead of stock options or restricted stock.

Coca-Cola, notorious for its generous executive severance packages, plans to give former CEO Douglas Daft an exit package reportedly worth $36 million when he left, the website reveals. The Executive Paywatch website also shines a spotlight on Sprint CEO Gary Forsee, who made over $19 million last year. He is expected to receive a $1.8 million annual pension benefit when he retires.

The new Executive Paywatch website gives readers the tools to execute a three-pronged strategy to contact regulators, the stock exchanges and the IRS. The campaign calls upon the SEC, the federal regulatory agency that protects investors' interests, to require better disclosure of CEO pay to investors. Visitors can also urge the stock exchanges to require genuine director independence, particularly on board of director compensation committees that are responsible for setting CEO pay. Finally, visitors can tell the IRS to enforce appropriate tax collection from America's executive elite, who can get away with abusive tax shelters, deferred compensation plans and underreporting of perks and capital gains.

"The average CEO made nearly $10 million last year while workers' wages were relatively stagnant," said Trumka. "We're calling on the SEC, the stock exchange and the IRS to join us in working towards responsible executive compensation levels."

The AFL-CIO represents more than 13 million working men and women. Union members participate in the capital markets as individual investors and through a variety of benefit plans. Union sponsored benefit plans have a total of more than $400 billion in assets.

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[Mr. Flibble]

1. Distribution of wealth - from the laborers to the greedy CEOs who get

middle-age-to-the-tomb, do-nothing severage packages when they quit or are fired. When you screw up, you get fired. You don't get a big cushy package that you can retire on for the rest of you life plus another 500 years on top of that. (most of us live on $40k/yr or LESS. At $26 mil, doled out as $40k/yr, one's easily made it for life and well, well beyond.)

Or, that's what the CEOs tell us: Screw up and you're out of a job.

When the CEO gets canned, why do they get such benefits for screwing up the company?

[katty]

2. Rewards for Incompetance and Greed - sign of the times

[Melynn]

8. That's what I don't understand. A CEO fails and walks away set for life

The Board of Directors and shareholders are to blame for putting up for this nonsense. I know that a lot of time the Board of Directors are in the pocket of the CEO but still it would seem to me that the average shareholder of these companies would be royally pissed.

I wouldn't invest in these type of Fortune 500 companies, their stock is just a racket and fraud to rip off the public.

[Anakin Skywalker]

3. To Borrow a Line From Shrub

"It's hard work f***ing with workers' lives", therefore these CEOs deserve the ridiculous amounts of moolah.

[truthisfreedom]

4. these guys are being payed like star quarterbacks. sorry, dudes, but

running a big corporation just isn't a spectator sport.

[cosmicdot]

5. more Executive Pay 2004 info

How 225 of the USA's largest companies compensate their chief executives. USA TODAY's compensation report is based on data from Aon Consulting's eComp Data Services: www.ecomponline.com, for the 225 largest companies by revenue that filed annual proxies through March 25.

http://www.usatoday.com/money/companies/management/2004-ceo-pay-total-chart.htm

snip from list

Company (Ticker) CEO
1st number: Salary
2nd: Bonus
3rd: Potential
options value
4: TOTAL PAY (Total pay also includes restricted stock, long-term
incentive payments and gains from stock options exercised, which are
not included in the chart.)

United Technologies (UTX) George David
$1,200,000
$3,500,000
$9,717,012
$98,038,622

Capital One Financial (COF) Richard D. Fairbank
$0
$0
$28,577,467
$85,062,076

Occidental Petroleum (OXY) Ray R. Irani
$1,300,000
$3,380,000
$11,386,529
$77,787,694

Genentech
(DNA) Arthur D. Levinson
$894,042
$1,310,000
$31,202,127
$74,562,776

Wells Fargo
(WFC) Richard M. Kovacevich
$995,000
$7,500,000
$22,246,719
$73,615,534

KB Home
(KBH) Bruce Karatz
$1,000,000
$5,000,000
$11,396,646
$61,284,832

Oracle
(ORCL) Lawrence J. Ellison
$675,000
$3,179,000
$7,786,236
$53,590,276

Qualcomm
(QCOM) Irwin Mark Jacobs
$1,062,282
$1,701,500
$8,636,484
$52,759,062

Harley Davidson (HDI)
Jeffrey L. Bleustein
$875,034
$3,531,310
$4,810,442
$51,525,478

the Robber Barons are back big-time

[Gregorian]

6. Well you can't buy real estate on minimum wage.

I mean, someone's making enough to buy all of the ten million dollar propeties. And a fixer upppppppper is two million. I kid you not. Maybe not in Kansas. But just try to find a few acres on any of the coasts. It's unreal. Ok, I'm ranting incoherently again. That's what I do.

}:Þ

[moondust]

7. While many of their employees are on Medicaid.

http://www.muscatinejournal.com/articles/2005/03/05/news/doc4229fce4f2f0f419983278.txt

DES MOINES, Iowa (AP) — Wal-Mart, the world's largest retailer, tops a list of Iowa employers with the most workers who receive health care paid for by state taxpayers, according to documents obtained by The Associated Press.

Wal-Mart employs 845 workers in Iowa who received health benefits from the state's Medicaid program last year, according to a report by the Iowa Department of Human Services. The report was obtained by the AP in a public records request.

~snip~

Critics say Iowa taxpayers are subsidizing labor costs for profitable companies that offer inadequate wages and benefits to workers.

~more~


In a word: OBSCENE.

[Voltaire99]

9. Eat the rich.

A little class war will take this party a long way from its present meandering uselessness toward decency and fairness.

Besides, Motorhead's already written the theme song. :-)

[orleans]

10. thanks for sharing this fun little website

someone i know works for tyco and is constantly beating those republican drums of patriotism (and bush) and i've been asking how she can work for a company who is depriving our country of much needed tax dollars (they have over a hundred offshore mailboxes in numerous tax havens). i have pointed out to her that the rest of us have to pick up the tab and support the government that tyco refuses to do.

i compared it to "the welfare" she is always bitching about (you know, the poor single parent females trying to get some extra food stamp allowance)only on a much more relevant scale--we're all paying for tyco only in a major way.

i wonder: "if you're so patriotic then how can you, in good conscience, work there?"

so--i just printed out the page on edward breen (the ceo of tyco): $16,703,351 (total compensation plus stock option grants); $78,468,327 (value of exercisable options); 471,986,173 (value of unexercisable options). gee--what a lucky guy (at everyone else's expense)

a report conducted by henry waxman for the committee on government reform stated:
"According to the prospectus to shareholders filed with the SEC,keeping the company incorporated in Bermuda would allow the combined company to preserve certain advantages enjoyed by ADT Limited. For example, TycoInternational reported that its overall tax savings was over $400 million in 2001."
http://www.gao.gov/new.items/d03194r.pdf

maybe someone i know shouldn't beat the war drums so loudly, shouldn't brag so much about her patriotism, shouldn't fly her flag so high, shouldn't be so self-righteous when it comes to us lowly democrats, shouldn't be judgmental when it comes to us liberals, and should take that fucking "support our troops" sticker off her car!

(please excuse my rant):rant: (but i feel a lot better now)