Corporations - Page 13

Corporations have been working nonstop to eliminate all possible labor expenses. Executives are no longer satisfied with getting most of the pie; now they want the whole pie. Wages have been reduced, pensions have been reduced, health benefits have been reduced or eliminated. Executives always try to sell each takeaway as an “opportunity.”

US Airways has given its employees the opportunity to work for less wages and benefits. It has now offered its workers the greatest opportunity of all, according to Reuters. Wednesday US Airways offered its nonunion employees the opportunity to work for free!

What spin will be used to sell this one? It could advertise: “Work for US Airways and Pay No Income Tax!” One does not have to pay income tax if no income is earned.

The company will pay those who are scheduled to work. If it can find employees gullible enough to work without pay, they can volunteer to work in Philadelphia through January 3.

Bankruptcy offers executives a chance to make a bigger killing than ever. They are often offered huge bonuses to stay on through the bankruptcy proceedings. Then they leave with big benefits packages.

What do employees get? They get reduced benefits and the opportunity to work for free.

US Airways Payback

The Home Depot Inc. and Lowe's Cos. Inc. have settled a credit card lawsuit, according to The Wall Street Journal. Credit card payments were applied to interest-free balances before regular purchases. Monogram Credit Card Bank of Georgia, a unit of Connecticut-based General Electric Corp. was also a defendant in the suit.

Over 2 million customers will be eligible to participate in the $4 million settlement. But the individual settlements will be nothing to write home about - a $5 rebate on a purchase of $15 or more.

Lowe’s Customer Rattlesnake Bitten

The Associated Press reported that departing Kmart CEO Julian Day is getting $90 million in stock options. This amount may seem excessive, but the man did have to put in 10 whole months of work the get it.

Do not worry about Mr. Day being unemployed; he is staying on the board. So he will have an income to buy food. Of course the $90 million represents only the stock options. He will $2 million for signing a release agreement with Kmart. He will also receive much of his $1 million annual bonus. He will collect other bonuses for the next three years if profit goals are met.

The employees who put in many years of work, only to have their pensions reduced, are no doubt really happy for Mr. Day.

The Wall Street Journal article linked below names Kmart and Duke Energy as pension cutters:

Host Of Subtle Ways to Pare Retirement Payouts

American companies are busily outsourcing workers when they should be insourcing CEOs from other countries. U.S. CEOs are way too expensive.

U.S. CEOs make 23 times as much as CEOs in mainland China, 10 times as much as CEOs in India and nine times as much as CEOs in Taiwan, according to the latest Towers Perrin worldwide survey.

European and Japanese CEOs run many of the world's leading companies for a lot less pay than Americans. U.S. CEOs make five times as much as CEOs in Japan, four times as much as CEOs in Spain, three times as much as CEOs in the United Kingdom, France, Italy and the Netherlands, and twice as much as CEOs in Germany and Switzerland.

U.S. CEOs have put American factory workers, computer programmers and engineers in a race to the bottom with workers around the world while keeping themselves in a rigged race to the top. "Supersize me" remains our CEO pay mantra.

CEOs on Business Week's Executive Pay Scoreboard of 365 major U.S. companies hauled in an average $8.1 million in 2003 -- up 9 percent from 2002 -- including salary, bonus and long-term compensation such as restricted stock and exercised stock options. That's more than $22,000 every day of the year.

The average CEO made $6.7 million more in 2003 than in 1980, when they made $1.4 million, adjusted for inflation. The average full-time production and nonsupervisory worker made $31,928 in 2003 and $31,769 in 1980, adjusted for inflation -- a gain of $159.

CEO pay skyrocketed 480 percent during 1980-2003, adjusted for inflation, while domestic corporate profits rose 145 percent, worker productivity rose 61 percent and worker pay stalled. If CEO and worker pay had increased at the pace of worker productivity, CEOs would have made $2.3 million in 2003 and workers $51,148.

CEOs made 44 times as much as workers in 1980, and 254 times as much in 2003. British CEOs make just 28 times as much as workers. You'd think the Brits were the ones who rebelled against royalty, not us.

American CEOs are paid like kings when they are hired, fired, retire and expire. Cendant CEO Henry Silverman provides an obscene example. On top of his $54.4 million in 2003 pay, he has more than $287 million in stock options not yet cashed in. In retirement, he'll get a lavish pension and perks such as use of company cars and aircraft. When he dies, his heirs will collect his company-provided $100 million life insurance policy.

Why are workers and shareholders earning less so descendants of CEOs can live like aristocrats for generations to come?

Colgate-Palmolive's Reuben Mark was the highest paid CEO in 2003 with compensation totaling $141.1 million. He was also on Business Week's list of CEOs who gave shareholders the least for their pay; shareholder return for 2001-2003 was a negative 19 percent.

The poster child for mad cash disease is Disney CEO Michael Eisner. His compensation averaged $121.2 million a year over the last six years, reports Forbes, while Disney shareholders had an annualized total return (including dividends) of negative 5 percent. Eisner's average yearly pay was 3,796 times as much as the average worker's and 300 times as much as the U.S. president's.

Overpaying CEOs is bad business. Compensation experts Joseph Blasi and Douglas Kruse analyzed executive pay at more than 1,500 top U.S. companies from 1992 to 2002. Corporations with significantly higher than average shares of employee stock options going to the CEO and the next four top executives had lower average total shareholder returns for the decade.

"Too many boards of directors think that only the top executives make a difference in the company's value, and the rest of the employees are just static factors of production like machinery," Blasi and Kruse observe in a new report.

"But a growing body of evidence shows that regular employees can really make a difference." Research shows that "broad-based stock option plans, employee ownership plans, and profit sharing plans are associated with future improvements in total shareholder return."

You'll know compensation policies have changed for the better if CEO pay goes down while worker pay goes up.

Buffett Targets CEO Pay

Corporations often prove to be real jungles. Even so, the Associated Press reported that a customer was surprised to get snakebitten while shopping at an Oklahoma Lowe’s.

On Sunday, an 18-inch eastern diamondback rattlesnake was lurking in the large trees section, and bit a customer in the hand.

In 1999, The Salisbury Post reported that a bomb was found in the Concord Lowe’s Home Improvement Warehouse. Less than two weeks earlier, two bombs exploded in the Salisbury and Asheboro Lowe’s stores. The bombs detonated within two minutes of each other. Three people were injured.

At first, it was thought that there was a connection between the bombings and a fatal crash at Lowe’s Motor Speedway. Lowe’s reportedly paid $35 million to get its name tacked onto the Charlotte Motor Speedway, for 10-years. When people hear the name “Lowe’s Motor Speedway,” they will be sure to rush into Lowe’s for a truckload of lumber. They just need to take care that they do not get blown up or snakebitten, in the process.

Consumers Sue Lowe's and Home Depot

MCI enjoyed irritating people with its moronic sales calls so much that it did not let the Indiana no-call law slow it down. The ensuing complaints will cost MCI $100,000, according to the Associated Press.

Indiana Attorney General Steve Carter said that this is the largest fine imposed since the law took effect in 2002.

Repeat offenders should get a $100 million fine! Almost 90 people filed complaints against MCI for violating the law. These people were irritated by MCI. The $100,000 fine will no doubt irritate MCI. Good work!

MCI Accounting Fraud

The Columbia Journalism Review has criticized Newsweek magazine for failing to disclose -- in a recent cover story citing lawsuit abuse -- at least three employee discrimination lawsuits targeting Newsweek's corporate family.

In a letter to Newsweek provided to the Columbia Journalism Review, the Foundation for Taxpayer and Consumer Rights (FTCR) identified the three lawsuits, and called on Newsweek to disclose the conflict-of-interest.

Below is the Columbia Journalism Review "Darts & Laurels" section in the March/April edition.

DART to Newsweek, for showing by its own example that - as its December 15 cover line put it - "Fear of Litigation is Paralyzing our Professions." Under the inside slug of "Justice," Stuart Taylor Jr.'s 3,400-word article described one extreme situation after another as evidence that frivolous, greed-driven lawsuits are jeopardizing medicine, education, and the ministry - and therefore society itself.

Essentially an amicus brief in the case for so-called tort reform, the article relied heavily on the testimony of one Philip K. Howard, identified as a "corporate lawyer and civic activist" who has "devised proposals to save Americans from a legal system gone mad" - proposals not only to limit damages but also to take some cases out of the hands of courtroom juries entirely. But while noting (parenthetically) that Howard's law firm, Covington & Burling, represents Newsweek, the article failed to mention a few related matters - among them, that a Covington & Burling specialty is defending employers against discrimination lawsuits, and that since 1999 Newsweek and its sibling, Post-Newsweek Stations, have been the target of such discrimination lawsuits at least three times. (One case went in the company's favor; one resulted in a $8.3 million verdict for the plaintiff; one is pending.)

Had this history been disclosed to readers, they might have been less amazed when the newsmagazine so blatantly took its stand. "One day, [Americans] may realize," the article concluded, "that their right to sue has become a trial for us all." Or, more accurately, perhaps, all of us at Newsweek.

The Associated Press reported that WorldCom overstated its profits by a few dollars. Between accounting fraud and write-downs for 2000 and 2001, $74.4 billion vanished! This pre-tax loss had never been previously reported.

Bob Blakely, chief financial officer, said "This filing culminates the largest and most complex financial restatement ever undertaken."

Shady corporations seldom confine their greed to only one area. So, it is not surprising that MCI converted the employees’ pensions into cash balance plans. But that was not enough of a windfall for MCI. When it merged with WorldCom, it stopped making any contributions to the hypothetical cash balance accounts! This information was revealed by House Committee on Education and the Workforce.

Shareholders to Police MCI

Labor problems at Wal-Mart appear to be getting worse, according to the latest New York Times report. An internal audit revealed extensive violations of child-labor laws. Even state regulations for breaks and meals were ignored.

Wal-Mart management is trying to explain everything away. Will they be able to explain away over 40 lawsuits alleging forced work through lunch and breaks, with no pay?

James Finberg, attorney, said “Their own analysis confirms that they have a pattern and practice of making their employees work through their breaks and lunch on a regular basis. What this audit shows is against their own company policy and against the law in almost every state in which they operate.”

John Fraser, former federal Labor Department official, said “When you find the frequency of this kind of violation in such a large employer, such a pervasive employer, it has to be a source of great concern.”

Leila Najjar worked for a Wal-Mart at age 16 and 17. She said “The store closed at 11 and there were nights we had to stay to clean up until 12:30, 12:45. It was a long day, and I was tired the next day at school. And sometimes, I'd have to work 10, 11 hours on a Saturday or Sunday.”

John Lehman ran several Wal-Mart stores in Kentucky. He said “There was no follow-up to that audit, there was nothing sent out I was aware of saying, `We're bad. We screwed up. This is the remedy we're going to follow to correct the situation.’ Wal-Mart stores are so systematically understaffed that they work minors just like they do adults. They don't have enough workers to take care of the business. Yes, their prices are low but then the stores are so understaffed that workers often don't have time to take their breaks or lunches.”

Maria Rocha said “It was just too busy to take a break. There were a lot of customers, and the managers would be mad if you took a break.”

Verette Richardson said that some cashiers urinated on themselves because they could not get a break.

Bella Blaubergs, a diabetic, said that sometimes she nearly fainted from low blood sugar because managers often would not give breaks.

Secret CEO Convention

Erica Beshears wrote a story in The Charlotte Observer that will warm the hearts of boardroom directors everywhere. On December 12, ElectriCities turned off the power to a family struggling with financial difficulties. The Bradley family had taken in a severely disabled girl, who was connected to various electric powered medical devices. The child, Amy, has the genetic defect, Angelman syndrome, and is afflicted with Lennox-Gastaut syndrome.

Scrooges everywhere will wholeheartedly agree that harsh treatment for those in arrears is a sound business practice. In the dead of winter, ElectriCities knowingly cut the power to the home of a terminally ill, 7-year-old child, who was clinging to life with the aid of machines. Where does sound business practices stop, and attempted murder begin?

How many thousands of dollars was the electric bill behind to warrant such drastic action? The family was behind only a lousy $250!

The family was able to get their power restored in a few hours, by scraping up a partial payment. There was no mention of what extra fees ElectriCities will charge them for the disconnection and restoration of electrical service. Some power companies fortify their bottom line by turning off electricity as soon as possible to customers with overdue bills. Then the customers are hit with fat fees for reconnection and extra deposits are demanded. For even more extra profit, some electric deregulated states allow the power companies to raise the rates for customers that have been disconnected. When these companies get their customers down, they kick them for extra profit.

James Bradley lost his job in New York, two years ago. The couple, their three children, and Amy, moved to Huntersville. Mr. Bradley required back surgery, which prevented him from operating his auto glass shop for 2 ½ months. Amy was hospitalized for a tracheotomy.

Ronda Bradley said “We fell behind, what can I tell you? My power's never been cut off in my life. This just doesn't happen to people like us. We're grown-ups… You don't take away a child's lifeline.”

ElectriCities Electric Director Craig Norfolk said that ElectriCities won't try to disconnect the power again during the holidays. That could mean that Amy is fair game on January 2.

Before Amy’s tracheotomy, the Make-A-Wish Foundation sent her to Walt Disney World.

See how some deregulated power companies profit by aggressively disconnecting customers:

Deregulation Promotes Suffering

The Wall Street Journal reported that Boeing made an employment offer to an Air Force employee while she was still overseeing Boeing contracts. Boeing continued negotiations with Darleen Druyun even as she was pushing a $21 billion deal to by 100 Boeing airplanes.

Boeing hired Ms. Druyun in January 2003. The Pentagon, Justice Department, and Congress began to probe the matter. Ms. Druyun, and Michael Sears, who had helped recruit her, were fired for unethical conduct. Chairman and CEO Phil Condit resigned, partly due to the incident.

The Pentagon is investigating the matter for illegalities.

Government acquisition officers must disqualify themselves from making contract decisions if they are discussing employment with the subject company. Contractors are also barred from discussing employment with someone who has authority over contracts affecting them.

Criminal prosecution is possible because Sears and Druyun allegedly tried to cover up their employment discussions. The pair may be facing obstruction-of-justice charges.

Mr. Sears wrote a book that gave advice on ethical conduct: “Soaring Through Turbulence.” The publisher has since pulled the book from being released.

When the government makes really stupid deals, there is always a reason. The deals may not benefit America, but someone, somewhere, benefits.

The Wall Street Journal reported that Qwest Communications shareholders voted to limit part of its executive compensation package. Pension fund gains must be excluded when calculating executive bonuses. Shareholders must approve any severance package that exceed certain amounts. Directors are limited to one-year terms.

The surprise of the century was that management backed all changes!

The Internal Revenue Service is starting to audit corporations over the compensation of executives, according to the Associated Press. The corporate audit may be augmented by auditing the personal tax returns of some corporate executives. Those loaded up with free apartments, stock options, private jet use, and sacks of money for getting terminated may get a chance to prove to the IRS that everything is legal.

IRS Commissioner Mark Everson said “Executive pay packages have become much more complex. We're taking a close look at these vehicles to make sure they fully comply with the law.”

The IRS is not identifying those under investigation. Excellent! The executives that will get their clocks cleaned will be notified in due time. Meanwhile, those with abusive compensation arrangements can stay awake a night wondering if they are on the list!

Dick Meyer made some valid points in “The Predator Class,” published by CBSNews.com. He feels that there is a predator class – “a professional, well-trained elite, supported by large institutions, that is adept and willing to use corrupt practices to accumulate wealth.”

Who can deny that?

Mr. Meyer feels the situation is hopeless. He said “The predator class will not be exterminated by cease and desist orders, Senate hearings, independent boards of directors and the invisible hand.”

It is true that vermin can never be exterminated. But vermin can be controlled. If the criminals that are caught, are punished severely enough, others will be less inclined to follow in their footsteps.

If those caught receive the equivalent of a ten dollar fine, expect their ranks to rapidly increase.

The Charlotte Business Journal reported that Lowe’s Cos. Inc. and The home Depot Inc. have been hit by a class action lawsuit by consumers in Seattle, Washington. Credit-card policies are the reason for the lawsuit.

The suit charges that consumers must first retire charges from interest-free purchases, before they can pay off existing or future balances charged to the stores’ credit cards.

A Lowe’s spokesperson would not comment.

Lowe’s recently drew the ire of some employees by banning smoking – even in the parking lot! Smokers can always go to Home Depot.

Smokers Employed By Lowe's Protest New Policy

The 1956 movie, “The Solid Gold Cadillac,” was based on a Broadway play by Howard Teichman and George S. Kaufman. The heroine was such a thorn in the side of corporate management, that they gave her a job, with the title of "shareholder relations." This was to keep her occupied and out of management’s hair.

The ploy failed miserably. But how did she fight the corrupt board of directors, when she only owned 10 shares of stock? She beat the board with proxy votes. She appealed to all the small shareholders to give her their votes.

Where does the solid gold Cadillac come in, you ask. The shareholders presented it to her for driving out the corrupt directors. The movie may not be that farfetched.

The Atlanta Journal-Constitution reports that a similar real-life situation may be developing. Houston accountant Mike Willingham launched a campaign against bankrupt Mirant from a Yahoo Internet chat room. Stockholders have given him control of the votes for 23 million shares of Mirant stock! He is now on the committee appointed to represent the company's stockholders' interests. Shareholders typically lose everything in bankruptcy. Now they have a fighting chance of not losing everything.

U.S. bankruptcy trustee George McElreath said “There have been Internet chat rooms that have affected the course of bankruptcies, mainly because they can affect the price of the stock… all those proxies. I've never heard of [shareholders] doing something like that.”

A Foundation for Taxpayer and Consumer Rights (FTCR) news release reported that it is suing Cingular and Nextel for billing and service rip-offs. The Nextel suit was filed in Los Angeles Superior Court. It was alleged that all customers were sent phony text messages and charged for them. Only the customers who figured it out and complained were given refunds. The Nextel bill is not even itemized – unless you pay an extra $2.50 per statement.

Cingular has a California state court and a class action suit pending. Cingular is charged with falsely advertising the quality of coverage. It is also charged with failing to maintaining adequate facilities to meet customers needs. This allegedly results in dropped calls, static, or making calls impossible to place. Also alleged against Cingular are charges of “early termination fees” and improper billing.

The California Public Utilities Commission ordered Cingular to pay a $12 million fine, but litigation will be required for consumers to be fully compensated.

Harvey Rosenfield, FTCR attorney, said “Consumers are mad as hell about cell phone service. First of all, it doesn't work - you can't get access, you can't make a call or you get disconnected in the middle of a call. Then there's the bogus fees and overcharges that nickel and dime us out of our money and the deliberately lousy customer service that prevents you from getting the bill fixed. If you try to walk away, they punish you with an 'early termination fee.’

“The companies have spent their money on advertising to get new customers, and not enough on the facilities needed to provide service to their customers. Thanks to deregulation, the only way cell phone abuses can be rectified is through lawsuits on behalf of the public. You might have known that deregulation would have something to do with getting ripped off! Nextel's duplicitous new billing practice is the cover-up of a major rip-off strategy that is starting to spread to other companies. Cingular is a poster-child for poor quality service and sharp business practices designed to enrich the company by ignoring its legal obligations to its customers.”

On the Cingular website, a copy of their contract was displayed. It stated that Cingular could alter the contract at any time! Under such conditions, you do not have a contract! They may try to charge you an early termination fee, but they are bound by nothing. It is like most employees’ benefits contract; it is a worthless piece of paper!

FTCR welcomed members of the public to provide information about poor service and abusive practices of Cingular, Nextel, and other companies.

The group can be contacted at www.consumerwatchdog.org or by sending an email to:  cellphones@consumerwatchdog.org

FTCR is a non-profit, non-partisan citizen research and advocacy organization.

William McDonough, accounting oversight board chairman, gave a warning to corporate directors, according to the Associated Press and Bloomberg News. He warned that Americans are angry about excessive executive pay and other corporate conduct. Directors must act aggressively to stem another wave of business scandals.

People are angry about the vicious cycle of extravagant executive pay, failures, layoffs, and lost pensions. What's more, they have been writing Congress about it.

CHARLOTTE, N.C. -- A new policy that prohibits employees from smoking on Lowe's Companies property has rankled some workers but the company says most favor it.

Some 27 employees at a Lowe's in Huntersville signed a letter of protest, including three nonsmokers, after an article about the smoking policy appeared earlier this month in The Charlotte Observer.

Three other employees at another Lowe's store said most employees who are smokers think the policy goes too far.

The policy took effect Sept. 1 and forbids use of tobacco anywhere on Lowe's property, including outdoors. All stores and corporate facilities have eliminated outdoor smoking areas. The only permitted time for smoking during the workday is lunch hour, when employees may leave Lowe's property.

"It's discrimination against us," said Jean Cox, a five-year employee at the Lowe's Huntersville store who has smoked for 40 years. She doesn't intend to quit smoking.

"It's getting down to where it's infringing on our rights if we choose to smoke," she said.

Lowe's employees appear to have no legal recourse to challenge the policy, said Michael Eriksen, head of the Institute for Public Health at George State University and a former tobacco researcher at the Centers for Disease Control.

"Smoking is not a protected right," he said.

Lowe's executives had described employee reaction to the policy as quiet and accepting and company spokeswoman Chris Ahearn said Monday that still was the case.

"We knew the decision would not be popular among all 130,000 employees," she said.

Internal surveys show a majority of employees favor the new policy, Ahearn said, declining to give the specific percentage.

Lowe's employees received six months' notice before the policy took effect. They also received opportunities for counseling to quit smoking. The company said one of its goals was to get employees to quit, resulting in healthier employees and lower insurance costs.

Below is the story as it originally appeared in The Charlotte Observer:

Not every employee of Lowe's Companies Inc. is happy with the home improvement retailer's stringent new antismoking policy.

But the law appears to give employees no recourse to challenge it.

Twenty-seven employees at the Huntersville Lowe's store -- three of whom are nonsmokers -- expressed opposition to the smoking policy by sending their names to The Observer after an article about the smoking policy appeared earlier this month.

Separately, three employees approached at the University area Lowe's store told The Observer that most employees who are smokers think the policy goes too far.

The policy, which took effect Sept. 1, forbids use of tobacco anywhere on Lowe's property -- including outdoors. All stores and corporate facilities have eliminated outdoor smoking areas. The only permitted time for smoking during the workday is lunch hour, when employees may leave Lowe's property.

The policy is the latest manifestation of a decades-old trend pushing smoking out of workplaces, but policies that ban outdoor smoking have only been gaining popularity about the past five years or so, antismoking activists say.

One study estimates that for each employee who quits smoking, an employer can save $300 in annual health insurance costs.

"It's discrimination against us," said Jean Cox, a five-year employee at the Lowe's Huntersville store who has smoked for 40 years. She doesn't intend to quit smoking, and says it's possible to smoke on Lowe's property -- say, inside a car during breaks -- without forcing nonsmokers to breathe secondhand smoke.

"It's getting down to where it's infringing on our rights if we choose to smoke," she said.

Kim Beatty, another employee who smokes, said she wishes Lowe's would go back to its former policy of designated outdoor smoking areas. "We weren't doing anything to anybody," she said.

Earlier, Lowe's executives had described employee reaction to the policy as quiet and accepting. That's still the case among most employees, spokeswoman Chris Ahearn said Monday.

"We knew the decision would not be popular among all 130,000 employees," she said.

But internal surveys show an "overwhelming" majority of employees favor the new policy, Ahearn said, declining to give the specific percentage.

An unscientific online poll by The Observer published Monday found 60 percent of 1,137 respondents believed it's fair for employers to ban smoking on outdoor property, and 40 percent were opposed.

Lowe's employees received six months' notice before the policy took effect. They also received opportunities for counseling to quit smoking. The company said one of its goals was to get employees to quit, resulting in healthier employees and lower insurance costs.

Lowe's employees appear to have no legal recourse to challenge the policy, said Michael Eriksen, head of the Institute for Public Health at George State University and a former tobacco researcher at the Centers for Disease Control. "Smoking is not a protected right," he said.

Research shows that companies who adopt policies like the one at Lowe's do succeed in getting some employees to quit. Workers who don't quit reduce their cigarette consumption significantly, he added.

"Actions like this will tip a small percentage of them to give up the habit, and from a public health standpoint that's good, and from a corporate standpoint that's good," he said.

Added Lowe's spokeswoman Ahearn: "The decision (to adopt the policy) was made based on the safety and health of employees."

After years of CEO’s stuffing their own pockets, as they take everything that they can from employees, people are beginning to catch on. CEO’s are no longer regarded as celebrities to be fawned over. They are finally being recognized for the weasels that they are.

The weasels are enabled by the board of directors, and these directors are also being watched more closely. Corporations got away with plenty by operating behind a wall of secrecy. As the wall crumbles, the CEO’s and directors are being exposed for what they are.

Many CEO’s have been exposed as not being particularly clever. Most are merely greedy followers. If they see another weasel making money, they will try to mimic the action. Ethics never seems to be a consideration.

Boards are often packed with the chairman’s cronies. The chairman’s pals are not likely to question his pay, or anything else. Many directors are only overpaid rubber stamps.

Former New York Stock Exchange (NYSE) Chairman Richard Grasso is the greedy weasel of the hour. He saw nothing wrong with getting $140 million dollars in one whack. When outraged NYSE employees sought his removal, he arrogantly refused to step down.

His arrogance did not save him; he was forced out in a short period of time. Other CEO’s may not be making quite the killing that Mr. Grasso made, but they are playing the same game. Many are making more money than they ever could possibly be worth. Not being content with the millions that they are already making, they rifle the employees’ pockets for nickels and dimes.

More pompous CEO’s need to be shown the door. There are capable people who would accept a CEO position for $100,000 per year – and do a better job than the present crop of prima donnas.

When an executive is paid vast sums of undeserved money, none are more disgusted than those who work for the corporation. CEO's get unfathomable amounts of money simply because they are in a position to receive it, not because they are worth it. There is nothing that one human can do that is worth some of the staggering sums paid to them.

To make the situation even more repugnant, the executives often gain obscene bonuses for cheating their employees out of already earned benefits. The excessive amounts paid to many CEO’s have absolutely no relationship to what they produce, if anything. Some only produce chaos, and still take home a sack full of money.

What if Mr. CEO is rescued from his burning house by a firefighter? The firefighter’s actions are worth more that anything the CEO will likely do in the next year, but he will receive his usual meger salary. If a policeman were to rescue Mr. CEO from an attempting kidnapping, he would earn his normal salary for doing his job. The emergency medical technician that saves the life of Mr. CEO will receive his normal pay. Real people are not going to be showered with millions of dollars, no matter how well they perform their jobs. They may get a tee-shirt or a coffee cup if they do something really outstanding.

Only the top executives stand to achieve great wealth for meeting obscure goals that they likely help to influence. Employees and the public have been sick of this corporate game for years. Most only shake their head and mutter about the injustice of it all.

Some employees are actually taking action, according to Reuters. The New York Stock Exchange floor traders are signing a petition demanding new management. They are outraged by the news of Chairman Richard Grasso collecting a payout of $140 million.

NYSE member James Rutledge has asked the U.S. Securities and Exchange Commission to investigate the matter of this huge compensation.

The Washington Post reported that Dick Grasso claims that he has no input into his own pay, but relies on the board of directors. Never mind that he has the most influence in selecting those directors. And who selected the compensation committee members that set his compensation? Why, Dick Grasso.

NYSE General Counsel Richard Bernard said that Since taking over the chairmanship in 1995, Grasso has recommended every member of the compensation committee that sets his pay.

This is not an isolated case. This same game is played in corporations all across America.

Mr. Grasso said “I'm very proud to say that I've been very well compensated.”

At least he recognizes it; no one is in any mood to hear him poor-mouth.

The chairman of the compensation committee from 1999 to 2003 was Grasso’s old pal Kenneth G. Langone. He is the founder and board member of Homo Depot. Grasso was also a Homo Depot board member, but agreed to step down.

Sarah Teslik, executive director of the Council of Institutional Investors, said “The standard wisdom is that over the past several years, Dick Grasso has run the NYSE with an iron first, picking directors and making all decisions, large and small, himself.”

The New York Times reported that Richard Grasso agreed to give up $48 million in benefits after some members of the board said he should. Some members said that this money was given up reluctantly.

CEOs at companies with the largest layoffs, most underfunded pensions and biggest tax breaks were rewarded with bigger paychecks, according to a new report, “Executive Excess 2003: CEOs Win, Workers and Taxpayers Lose.”

Median CEO pay skyrocketed 44 percent from 2001 to 2002 at the 50 companies with the most announced layoffs in 2001, while overall CEO pay rose only 6 percent. These layoff leaders had median compensation of $5.1 million in 2002, compared with $3.7 million at the 365 large corporations surveyed by Business Week.

At the 30 companies with the greatest shortfall in their employees’ pension funds, CEOs made 59 percent more than the median CEO in Business Week's survey. The General Accounting Office has labeled the Pension Benefits Guaranty Corporation, the federal agency that insures the nation’s private pensions, “high risk.” Meanwhile, many companies are protecting executives with guaranteed golden retirement packages.

Congress fueled runaway CEO pay and helped U.S. companies avoid paying their fair share of taxes by blocking proposed stock option reforms ten years ago. Many corporations have boosted reported profits by not counting stock options as an expense in their financial statements to shareholders. Those very same corporations do deduct the value of stock option exercises from their corporate tax returns, reducing their tax burden. Between 1997 (the year that a proposal to require expensing of stock options would have taken effect) and 2002, 350 leading firms received an estimated $3.6 billion in tax deductions based on their CEOs filling their pockets with $9 billion in option gains. A new proposal to require expensing of options is now under consideration.

This lost federal revenue is about the same amount as the combined 2003 budget deficits of seven of the top ten largest states (Florida, Illinois, Pennsylvania, Ohio, Michigan, New Jersey, and Georgia). It also approximates the amount by which spending on Medicaid in all 50 states exceeded budgeted amounts in 2003. Corporate taxes’ share of federal taxes dropped from 12 percent in 1996 to 8.7 percent in 2001.

At the 24 Fortune 500 companies with the most subsidiaries in offshore tax havens, median CEO pay over the 2000 to 2002 period was $26.5 million -- 87 percent more than the $14.2 million median three-year pay at firms surveyed by Business Week.

The top layoff leader in terms of layoff numbers is Carly S. Fiorina at Hewlett-Packard. She fired 25,700 workers in 2001, and saw her pay jump 231 percent, from $1.2 million in 2001 to $4.1 million in 2002.

The top layoff leader by percentage pay increase is AOL Time Warner's Gerald M. Levin, who presided over 4,380 layoffs in 2001. Levin's pay increased a staggering 1,612 percent, from $1.2 million in 2001 to $21.2 million in 2002.

The highest paid layoff leader was Tyco's Dennis Kozlowski, who took home over $71 million in 2002, a $34.7 million raise, even though he was forced out in disgrace mid-year. In 2001, Tyco laid off 11,300 workers. The top 50 layoff leaders cut a total of 465,252 jobs in 2001.

Between 1990 and 2002, average CEO pay rose 279 percent, far more than the 46 percent increase in worker pay, which was just 8 percent above inflation. CEO pay dramatically outpaced the performance of the S&P 500, which rose 166 percent in the same period, as well as the 93 percent rise in corporate profits.

The CEO-worker pay gap was 281-to-1 in 2002, nearly seven times greater than the 1982 ratio of 42-to-1.

Authored by Sarah Anderson, John Cavanagh, Chris Hartman, and Scott Klinger, “Executive Excess 2003” is the tenth annual CEO pay study by the Institute for Policy Studies and United for a Fair Economy.

The Institute for Policy Studies is an independent center for progressive research and education in Washington, DC. United for a Fair Economy is a national organization based in Boston that spotlights growing economic inequality.

New York Stock Exchange Chairman Richard Grasso makes an annual salary of $1.4 million, according to Bloomberg News. It looks like he could scrape by on a flat million dollars per year, but as CEO salaries go, it’s not too excessive.

Of course there is the guaranteed bonus of at least $1 million through 2007. The $1.4 million take now becomes a minimum of $2.4 million. His actual salary and bonus haul for 2002 was $12 million! He cleared and $15 million in 2001.

As the average employee wonders if he will get a raise or bonus of a few percent, some executives get bonuses in the millions of dollars.

These figures do not include the deferred compensation and "retirement" savings. These will amount to an extra $140 million!

The true compensation figures are usually well hidden. These figures were disclosed due to numerous complaints of the secrecy. Now everyone knows why they were kept a secret.

The New York Times reported that some shareholders have been successful in whipping corporations into shape. Teachers Retirement System of Louisiana sued Siebel Systems and won several concessions.

Earlier, Sprint settled with shareholders and appointed an independent director to oversee the board. MCI shareholders also won concessions, such as a court-appointed monitor.

Last year, CEO Thomas M. Siebel received a salary befitting his true worth – one dollar and no options or bonus.

Stuart M. Grant, lawyer for the Louisiana fund, said “We are hoping that other companies will start voluntarily adopting many of the provisions we have in the settlement. But if they don't, I think you're also going to see shareholder resolutions trying to adopt some of these things.”

The shareholders who refuse to act in their own best interest will get the same thing as employees who refuse to act in their own best interest – NOTHING.

Since the MCI management does not know too much about how to run a business, the shareholders are going to baby sit them, according to Reuters and The Associated Press. A court-appointed monitor has laid down the law to MCI.

WorldCom has shriveled up and blown away. Former Securities and Exchange Commission Chairman Richard Breeden and shareholders will now be policing MCI. A new corporate charter is being formed that can only be changed by shareholder consent.

Chairman and CEO Michael Capellas said “We know we have to do even more to regain public trust.”

Shareholders will be able to nominate their own candidates. After 10 years, directors are out. Shareholders will use an electronic "town hall" to help oversee the directors.

The CEO will no longer be able to serve as chairman. He will not be able to sit on other boards. There will be no outright stock grants for board members.

Mr. Breeden has recommended a $15 million cap on executive compensation. That’s good, only it’s about $14 million too high. Anyone who cannot live off of a million dollars a year should crawl off in a ditch and die.

Other recommendations are: no retention bonuses, investors must approve all stock options, no options to be granted for five years.

WorldCom will pay a settlement of $750 million to shareholders. MCI is barred from any federal government business.

This is not the end of the plight for WorldCom/MCI. Oklahoma is now filing criminal charges against the company.

It is time for some proactive measures at other corporations. There are many energy corporations that could use the same rules.

MCI is Dog Meat