Wednesday, December 27, 2006

Like King Midas in Reverse

Just look at this post and if you don't get upset, then you are clearly too comfortable. I got it from a new blog I've been perusing. Reminded me of those Harpers's lists.

Wages that an average CEO earns before lunchtime: more than a full-time minimum wage worker makes in a year. The ratio of the average U.S. CEO’s annual pay to a minimum wage worker’s is now 821:1. [Nobody beats the U.S. when it comes to the difference in pay between CEOs and the average worker. In 2000, on average, CEOs at 365 of the largest publicly traded U.S. companies earned $13.1 million, or 531 times what the typical hourly employee took home. The corresponding ratio in 1980 was only 42, and in 1990 it was 85. As one source has put it, "in 2000 a CEO earned more in one workday (there
are 260 in a year) than what the average worker earned in 52 weeks. In 1965, by contrast, it took a CEO two weeks to earn a worker's annual pay". US CEOs' pay rose 313 percent from 1990 to 2003, an advocacy group UFE said. By contrast, the Standard & Poor's 500 stock index rose 242 percent and corporate profits gained 128 percent.]

The total compensation in 2005 of Barry Diller of IAC/Interactive, the highest paid CEO in the US today: $469 million. Additional amount that Mr. Diller received in new stock options “to motivate Mr. Diller for future performance”: $7.6 million. [The bright side of that coin is that at least there doesn't appear to me any anti-gay discrimination way at the top of the corporate food chain.]

Percentage of Americans who feel chronically overworked: 30

Years of unused vacation time that American workers collectively give back to their employers each year: 1.6 million. [Ken, are you paying attention?]

Percentage of women earning less than $40,000 per year who receive no paid vacation time at all: 37

Payment per episode that Donald Trump receives to host The Apprentice: $3,000,000

Average amount that companies spend to recruit a new CEO from outside the company: $2,000,000

Probability that the newly hired CEO will either quit or be fired within the first eighteen months: 1 in 2

Estimated number of people lined up outside the new M&M store set to open in Times Square responding to ads for “on-the-spot” hiring for 200 jobs, 65 of which were fulltime: between 5,000 and 6,000

Starting salary that drew them there: $10.75 per hour

Fee Paris Hilton is seeking to host a New Year’s Eve party in NYC, Miami, or L.A.: $100,000 plus a private jet. [DWT one-time art director, Adam Fox, once begged me for tickets to see Paris host a promotional party in Miami. I warned him that she messes up worse than Bush but he was trying to seduce and impress someone and felt a Paris Hilton party was just what the doctor ordered. Of course he was furious after the fact, when she was rude, drunk and disorderly, arrived late and left early, cursing out the attendees and calling them losers. What did she expect? I mean, really, who but a terminal loser would actually voluntarily go to a Paris Hilton party? Even for free.]

Amount that Ms. Hilton is set to inherit from the Hilton Hotel fortune: $350 million.

Number of times that Congress has reduced the estate tax since it last raised the federal minimum wage: 9.

Longest period in which the federal minimum wage has not been increased: 1997–2006. [Do you know anyone who has ever voted for a Republican member of Congress?]

Number of workers who would directly benefit from an increase in the minimum wage: 5.6 million.

Number of very large estates that would directly benefit from a reduction in the estate tax: 8,200.

Highest price per custom-fitted, handmade power suit in Armani’s new line, which hopes to respond to what ex-Gucci head designer Tom Ford calls “a lot of pent-up demand for true luxury [from men who] are getting rich first, and they want to deck themselves out before they deck out their wives”: $20,000.

Number of households using credit to cover basic living expenses: 7 in 10.

Amount in tax breaks and subsidies that last year’s energy bill paid out to the gas and oil industry during a period of record profits and higher prices at the pump: $6 billion.

Campaign donations that Senator Kay Bailey Hutchison, who voted for the energy bill, received from the oil and gas industry: $500,000, making her the top recipient of oil contributions in the 2006 election cycle.

Percentage of U.S. workers who are confident they will be able to live comfortably after retirement: 68.

Percentage who have saved less than $25,000 toward their retirement: 53. [Yes, you are meant to try to correlate this percentage with the percenatge preceding it. Let us know if you get anywhere.]

Percent of African-American and Latino families that have zero or negative net worth, respectively: 31 and 38.

Date on which USA Today reported that Dr. Anthony Griffin of the Beverly HillsCosmetic Surgery Institute, who appears on the ABC program Extreme Makeover, predicted that CEOs will lead a surge in male cosmetic surgery because, he says, "for instance,executives on trial for corporate scandals would improve their chances for acquittal with a makeover just before trial": November 4, 2006.

Date on which the Dow Jones Industrial Average reached its all-time high: October 26, 2006. (Umm... until today when it closed over 12,500 for the first time ever.)

Decrease in percentage of Americans who own stocks from 2004 to 2006, the first such decline on record: 51.9% to 48.6%.

Total Wal-Mart received in government subsidies, sometimes called “corporate welfare” by activists, in 2005: $3.75 billion.

Percent of the decline in welfare caseloads that is due to TANF programs failing to serve families that are poor enough to qualify, rather than due to a reduction in the number of families poor enough to qualify for aid, in the ten years since "welfare reform": 57 [Bill Clinton, there was a lot worse about him than Monica whateverhernamewas.]

Projected total in Christmas bonuses that investment banks in New York City will pay out in 2006: $23.9 billion.

Estimated additional amount U.S. workers would receive annually if all employers obeyed workplace laws: $19 billion.

Ratio of compensation of CEOs of publicly traded defense companies to privates before September 11th, 2001: 190 to 1.

Ratio in 2006: 308 to 1. (So this is what Bush was talking about when he said the economy was growning!]

Percentage increase in out-of-pocket medical expenses for the average American in the past 5 years: 93

Estimated amount the U.S. would save each year on paperwork if it adopted single-payer health care: $161,000,000,000. [What what about Doctorbill Frists' family? Don'y you want them to be billionaires?]

Date on which incoming Treasury Secretary Hank Paulson announced “Amid this country’s strong economic expansion, many Americans simply aren’t feeling the benefits. Many aren’t seeing significant increases in their take-home pay. Their increases in wages are being eaten up by high energy prices and rising health care costs, among others”: August 2, 2006.

According to exit polls in the midterm elections, percentage of Americans who think life for the next generation will be about the same or worse respectively: 28, 40.

Tuesday, December 26, 2006

Pfizer shareholders have been screwed!!

Read this is you want to get angry about the state of Executive compensation. Sounds boring I know, but the article, from Christmas's Eve NY Times, really got me going.

December 24, 2006
"Fair Game"

A Lump of Coal Might Suffice

HERE'S hoping that Hank McKinnell [right], the former chief executive of Pfizer, chose a giant Sequoia for his Christmas tree this year, because there is no way he could fit the $200 million gift that his old board gave him a few days ago under a mere Fraser fir.

Since Pfizer dumped Mr. McKinnell last July, we have been awaiting the details of his severance arrangement. We guessed it would be dizzying--his pension alone had been estimated at $83 million.

But after the company said late last Thursday that the terms of the package would soon emerge--on a day when shareholders, distracted by holiday shopping, might not notice--we knew the amount would be odious.

Here's how Mr. McKinnell's $200 million package adds up. First is his pension of about $6.65 million a year for as long as he lives. The company estimates its value at $82.3 million. Sweet.

Next comes $78 million in deferred compensation, which includes $67 million in pay that Mr. McKinnell has set aside over the years. Then there is an estimated $18.3 million in performance-based shares. Given Pfizer's recent results, perhaps it would be more accurate if these were identified as failure-based shares.

Tack on $12 million in severance, vested stock grants worth $5.8 million and a $2.15 million bonus and Mr. McKinnell has all the makings of a very, merry Christmas. But that's not all.

Mr. McKinnell, 63, also received $576,573 worth of medical, dental and life insurance as well as the unspecified value of continued medical and dental coverage under Pfizer's retiree plans for him and his partner, Joanna Slonecka. Included in this pot is the cost of financial counseling programs. (Maybe he can dip into that amount to help line up some therapy for Pfizer's board.)

The most curious figure of all, though, is $305,644--rounded up to the nearest dollar, presumably--that represents the value of Mr. McKinnell's unused vacation days.

"The Pfizer board of directors has been inept," said Frederick E. Rowe Jr., a money manager in Dallas and president of Investors for Director Accountability, a grass-roots organization that organized a vote against directors at Pfizer's shareholder meeting last April. "Over a long period of time, it has obligated Pfizer shareholders to pay Mr. McKinnell staggering sums for continuous, unmitigated failure. This is nothing other than a betrayal of Pfizer employees and shareholders."

Paul Fitzhenry, a Pfizer spokesman, said Friday that the payouts to Mr. McKinnell were the company's obligation under an employment contract struck in 2001 when Pfizer shares were at $46, far above the $25.97 at which they closed on Friday.

"The stock had risen more than tenfold over the preceding 10 years and Hank McKinnell played a large role in increasing Pfizer share value during that period," Mr. Fitzhenry said. None of Pfizer's directors, including Mr. McKinnell, were available to discuss the exit package, Mr. Fitzhenry added.

According to the regulatory filing that outlined Mr. McKinnell's take, the package was priced as of Dec. 13 and his resignation letter was signed Dec. 18. But the company waited until late on Dec. 21 to file the terms of the deal with the Securities and Exchange Commission.

The $200 million that Mr. McKinnell walked away with is also indicative of how much executive compensation can remain hidden from shareholders' ken. Recall that Pfizer has prided itself on being an enlightened corporate champion of full disclosure and transparency; its proxy statement last year provided significantly more details on pay than is typical.

Still, that proxy was silent on the $78 million in deferred compensation owed to Mr. McKinnell. This means shareholders can assume that the amount and nature of what was under wraps at Pfizer is not an exception but rather the rule across corporate America.

Mr. McKinnell's $200 million is even more disturbing when put next to the roughly $137 billion in market value that vaporized on his watch. That Mr. McKinnell forced his shareholders to pay $305,644 for his unused days off after draining them of $137 billion is downright stupefying.

But this is how too many leaders behave in 2006. They give large numbers of pink slips to employees. They create really big losses for their shareholders. But they make sure they chisel the company's owners for every nickel and dime, including dental coverage, unused vacation days and financial counseling programs.

Contrast Mr. McKinnell with James E. Burke [left], the former chief executive of Johnson & Johnson, who led that company through the Tylenol crisis of 1982, when every bottle of the medicine had to be recalled after seven users were poisoned in Chicago. The brand not only survived, it thrived. And Johnson & Johnson went on to become the dominant health care company in the United States.

Back in 2003, Mr. Burke was honored by Harvard Business School, his alma mater, with an Alumni Achievement Award. "Remember that being a business leader is about giving--not taking," Mr. Burke said in an interview at the time, which is archived on the school's Web site. "We've corrupted the system by hiring boards of directors that feel beholden to the C.E.O.," Mr. Burke said, adding that business executives need to "recreate a trust agenda."

Mr. Burke's views resonate even now, three years later, but the lessons were clearly lost on Mr. McKinnell. And Mr. Burke's thoughts are especially meaningful given that many executives are lobbying hard in Washington and elsewhere to recreate the pre-Enron "trust me" agenda.

At least there is this: while Mr. Burke is recognized as one of the greatest business leaders of all time, Mr. McKinnell will go down in history as something else: the quintessential me-first executive, mismanaging the company and then wringing from his shareholders every penny possible on his way out.

Lest Mr. McKinnell's accomplishments be forgot, Mr. Rowe said Investors for Director Accountability has decided to create an annual prize, beginning in 2007, to recognize the public company board that has enabled the most self-serving performance by a chief executive in America. It will be called the McKinnell Award. Stay tuned to see who the recipient is.

In the meantime, Merry Christmas, Hank. From the shareholders who lost $137 billion on your watch and the workers who will lose their jobs because of your stewardship. We hope you enjoy the money piled under your tree.

Every last nickel.

Tuesday, December 19, 2006

If you're nice...

A free copy could be yours this holiday season. If you're naughty, you get two copies.

Saturday, December 16, 2006

Big Mouth

Grace & I spent a lovely morning/early afternoon together today: quality time in the park on the swings and slides, and also at Grace's "shop," an ad hoc invisible store with no actual merchandise, usually on a swing set behind bars, but where every item costs the same price.
Grace, what are you selling?
How much is it?
"100 pounds."
what else?
How much is that?
"100 pounds"
And also?
It costs...
"100 pounds"

I believe this shop has been bankrolled by mum.

Then we went and had a lovely lunch followed by some shopping for Sarah for Christmas and several diaper changes in Barnes and Noble. She pulled the classic poop 5 minutes after the diaper change. Tights, shoes, etc. Lather, rinse repeat.

She fell asleep in the stroller on the way home, and Sarah traded with me and took over, prolonging the nap as long as possible on the move.

As soon as she woke up she exclaimed, "Daddy bought mommy a shirt in the running shop."

Thanks, blabbermouth. She also copped to me giving her the fizzy apple juice at lunch. Didn't think to mention the lovely salmon & wild rice with wheatberries. Typical.

Wednesday, December 13, 2006

I bet you didn't know this

Who was the best man at the now late Peter Boyle's wedding in 1977?

John Lennon.

Friday, December 08, 2006

2 Posts in One Night? Holy SHIT!!!

Can I just say that as a cultural snob, I am tired of PBS Pledge Week! What I don't understand is that during the "regular season" Channel 13 (my local PBS station in NY) shows generally great stuff, but during Pledge Week (fortnight) we are subjected to Johnny Mathis, bad folk music a la A Mighty Wind, and more Victor Borge (who I like but is absent 98% of the year) than I can bear.

The worst part is that no 2 PBS stations coordinate their Pledge Drives, so that you are sort of subjected to a nonstop barrage of lame exhortations to give money for endless "Celtic Woman" reruns.

Pledge Week offers really tired Roy Orbison discs, but what I really want is a Frontline box set. Sorry, call me a snob, but when I think of PBS, I don't think of a 15 year old tape of Roy Orbison's Black & White Night (with both Bruce & Elvis Costello!!) . I want Frontline!!! And Charlie Rose.

Followup to previous story

Sitting on my lap today, Grace (in this case clearly her father's daughter) emitted an odor that would have gotten her forcibly removed from any American Airlines Flight in the world. Staggering.

On a related note, potting training is moving ahead in fits and starts. Every time she sits on the loo there is success, followed by much cheering (Yeeeeeeea!) but there is currently no great interest in self starting. Perhaps that will all change sometime before puberty.

Wednesday, December 06, 2006

Best. Article. Ever.

America's War on Farting!!

NASHVILLE, Tennessee (Reuters) - It may be one problem airline security officials never envisioned -- a passenger lighting matches in flight to mask odours from her flatulence.

The woman's actions resulted in an emergency landing on Monday in Nashville of an American Airlines flight bound for Dallas from Washington, D.C., said Lynne Lowrance, a spokeswoman for Nashville's airport.

Other passengers reported the odour of burnt matches, but the woman was not forthcoming when asked about it, Lowrance said on Wednesday.

"Of course, she was scared and embarrassed but all the passengers had to disembark, all the luggage had to be searched, a canine team was brought in, and about three hours were consumed in sorting out the situation," she said.

The woman was not allowed back on the flight and barred from flying on American Airlines, Lowrance said.

"Since there was no malice involved and the incident was accidental, she was not charged with anything," she said.

Passengers are permitted four books of paper safety matches on a plane but cannot light them during flight, Lowrance said.

"I've had calls from people all over the country about this," she said. "And I don't have the answer to this problem."