 |
A year that began so brilliantly — for our top 1 percent — is ending in angst.
Just one year ago, Forbes was predicting that 2011 might well turn into “the best year yet to be rich.” That prediction made sense. President Obama and GOP leaders in Congress had just cut an eleventh-hour deal that extended the Bush income tax cuts for America’s deepest pockets — and dropped the federal estate tax on the wealthy even lower than George W. had left it.
How our world has changed since then. Smug smiles no longer grace the faces of America’s rich and powerful. The Occupy Wall Street upsurge has Wall Street’s toughest CEO, Jamie Dimon of JPMorgan Chase, whining to reporters. That stuff about “everyone who is rich is bad,” said Dimon last week, “I just don’t get it.”
President Obama does now seem to “get it.” His December 6 address at Osawatomie, Kansas — site a century ago of Teddy Roosevelt’s most powerful warning against grand concentrations of private wealth — resounded with the cadences of the Occupy movement. In broad and clear strokes, the President described how “the breathtaking greed of a few” has plunged us into crisis.
This week in Too Much we detail that “breathtaking greed” with our fourth annual list of America’s ten greediest. Last year, at this time, the greedy we chronicled seemed arrogantly triumphant. Now they just seem pathetic.
The wheel has turned. In the year ahead, we all need to keep pushing . . .
With this week’s Too Much, we’ll be beginning our annual year-end publishing hiatus. Our weekly Too Much will return in early January, all tuned up for what figures to be an eventful new year.
Want to help get that year off to a rousing start? How about encouraging friends and neighbors to sign up for a Too Much subscription? You can even personalize an email invitation. And if you’d like to go above and beyond, please consider making a year-end donation via our Web portal at Inequality.Org. Thank you!
Peter Steiner, October 2011, reprinted from Hopeless but not Serious
Presenting America’s Ten Greediest of 2011
One puts on football pageants. Another makes mega millions on a virtual farm. They all remind us how much needs to change, economically and politically, in 2012 and beyond.
The greediest among us in 2011 probably haven’t been any greedier, as a gang, than any greedy of the recent past. They just seem that way.
Why so? We have a whole new frame of reference. This fall’s sudden — and exhilarating — rise of the Occupy movement has helped us remember what we, as a society, had sadly forgotten: that decent, smart societies never let the few grab away rewards that ought to be shared among the many.
Who grabbed most greedily in 2011? We have no statistical yardstick to help us make that call. You don’t, after all, have to make a million to rate as an all-star greedster. You do have to be ruthless, self-absorbed, and grossly insensitive.
That description, we’ll admit, fits far more folks than our ten dis-honorees below. Maybe next year, we can hope, we’ll have a harder time filling out our top ten.
10/ Paul Hoolahan: Skimming the Sugar
The Sugar Bowl enjoys tax-exempt status and regularly touts its contributions to good causes. But Hoolahan’s favorite good cause may be his own. He took home just under $600,000 in 2009, the latest year with figures available, almost quadruple his $160,500 paycheck for the same job 13 years earlier.
Hoolahan and his two top aides are skimming off $1 of every $10 the Sugar Bowl generates, a Washington Post analysis recently noted. At the same time, adds thetArizona Republic, the Sugar Bowl and its three “Bowl Championship Series” partners are donating to charity only 20 cents from every $10 in revenue.
The Sugar Bowl disputes those figures. Hoolahan’s aides say their bowl never bothers to report many donations “as charitable giving.”
This past September, one of those unreported “donations” came to light. The Sugar Bowl had spent, a Hoolahan flack had to acknowledge, at least $3,000 on political contributions to the governor of Louisiana, a nonprofit tax law no-no.
9/ Michael Duke: Shifting the Goalposts
But sometimes squeezing just can’t get the job done. No big deal for Michael Duke. He just moves the goal posts that determine his “pay for performance.”
Duke moved into Wal-Mart’s CEO suite in 2009. Since then, he has ended “premium pay” for hours worked on Sundays,eliminated profit-sharing, sheared health care benefits, and cut staffing so low, Retailing Today reports, that customers sometimes can’t find shopping carts because the store where they’re shopping has no employees available to collect carts from the parking lot.
This sort of chronic understaffing may help explain why Wal-Mart’s “same-store sales” — the business “metric” that compares a retail chain’s sales at the same group of stores from one quarter to the next — started tumbling soon after Duke took over as CEO and didn’t stop sinking until this past fall.
This same-store nosedive should have cost CEO Duke big time at pay time, since same-store sales, explains a New York Times analysis, accounted for 30 percent of the factors that Wal-Mart used to calculate Duke’s bonus.
But lo and behold, all of a sudden this past spring, Wal-Mart’s board of directors compensation committee eliminated same-store sales from Duke’s bonus calculations. The immediate result: Duke would receive $16 million in “performance” pay — despite Wal-Mart’s stunning same-store sales tailspin.
Duke’s total $18.7 million paycheck for the year would represent 750 times the annual pay of a Wal-Mart worker making $12 an hour, working 40 hours a week.
Some 75 percent of Wal-Mart workers make less than $12 an hour, notes a new report on Wal-Mart’s business model, and few Wal-Mart workers get 40 hours.
8/ Robert Iger: Impersonating Uncle Walt
Iger became Disney’s numero uno back in 2005, and this year has been one of his best. In January, Disney announced that Iger’s latest annual compensation topped $28 million, a neat 35 percent increase over the year before.
In October, Iger picked up a new pay deal that extends his CEO contract into 2015 and adds on a cushy final year as Disney “executive chairman” — at $2.5 million — to help him make the transition into fantasyland retirement.
Not enough to make you happy? How about this: This fall Iger became the newest member of the Apple computer board of directors. He’ll get a six-figure tip for the gig, plus a free copy of any new Apple product he wants. Happy, happy, happy.
Unfortunately, some housekeepers who work at the hotels in Disneyland have been raining on Bob Iger’s Disney parade. They went almost four years without a contract because they refused to accept Disney demands they feared would force them to pay hundreds of dollars a year extra for health care.
These spoilsport housekeepers testified earlier this year at a community forum that made poor Bob Iger seem the reincarnation of Uncle Scrooge McDuck. The original Walt Disney, the hotel workers union pointed out, made 108 times what his housekeepers were making in 1966. Iger now makes 781 times as much.
Those housekeepers just don’t understand. Uncle Walt could always whip out a pencil and draw Mickey Mouse when he wanted to feel happy. Robert Iger can only count his money.
Iger may now have to be content with a teeny bit less. Disney officials and hotel workers finally agreed on a new contract the first week in December.
7/ Doug Oberhelman: Threatening an Exit
Mused Caterpillar chief exec Doug Oberhelman: “I have to do what’s right for Caterpillar.”
And maybe himself, too. In 2009, a year that saw only three U.S. corporations lay off more workers than Caterpillar, Oberhelman took home just under $3 million. His last year’s paycheck: $10.4 million.
Caterpillar workers, meanwhile, have a new six-year contract that, one news report notes, includes no wage raises and a big boost in health care premiums.
Caterpillar seems to exploit tax loopholes as systematically as employees. From 2004 to 2009, the company paid in Illinois income tax only 1.04 percent of its $30.4 billion in earnings.
6/ William Weldon: Seeing No Evil
That’s one reason J&J sales have failed to increase the past two years — for the first time since the Great Depression. Jobs at J&J have fallen, too. The company has announced nearly 10,000 layoffs since 2004, the Institute for Policy Studies reports, despite $49.6 billion in profits the last three years alone.
Could any of this profiteering, job cutting, and chronic recalling be related? Absolutely not, says Johnson & Johnson CEO William Weldon. He declared last year that J&J had no “systemic problem.”
That may be right. Johnson & Johnson’s prime problem may be Weldon’s personal greed. In 2007, the CEO “restructured” the company and slashed J&J’s corporate quality control operation by 35 percent. The next two years, a hiring freeze made replacing newly vacant quality positions almost impossible.
These moves were soon paying big dividends — for Weldon. He took home $25.6 million in 2009. Then came the flood of recalls and assorted other scandals from kickbacks to illegal drug marketing. The Johnson & Johnson board response? The company dropped Weldon’s annual pay — to $23.2 million.
This past summer, a special J&J board member investigative panel clearedWeldon and his management buddies of any blame for the company’s recall disasters. Explained the panel: “Senior management never issued any directives to the effect that quality should be sacrificed for production.”
Weldon, notes an Associated Press analysis, also serves as chairman of the Johnson & Johnson board and, as such, has nominated a host of J&J board members to their current positions.
5/ Lloyd Blankfein: Stiffing the Sisters
God apparently pays well. In 2007, on the eve of the financial meltdown banks like Goldman did so much to fire up, Blankfeincollected a $68 million bonus, the largest in Wall Street history. The year before, his bonus hit $54 million.
In other words, Blankfein has done more than his share to help make New York one of the world’s most unequal cities. In 2011, Blankfein had a chance to hit the restart button. He didn’t.
In April, a Goldman Sachs required filing revealed that Blankfein, after going two years without taking a cash bonus, had gobbled up $5.4 million in bonus cash for the bank’s latest fiscal year. And plenty more in stock awards and salary. His total pay for the year: $19 million, about double his total pay the year before.
In May, at the Goldman Sachs annual meeting, Blankfein faced a shareholder resolution — brought by four groups of nuns — that would have initiated an investigation into whether executive pay at the firm rated as “excessive.”
Blankfein didn’t seem to think that investigation would be a good idea. At the time, he held a stash of Goldman shares worth $527.6 million. Blankfein and his allies would go on to have the nuns’ resolution crushed in shareholder voting.
4/ Alan Mulally: Shrinking to Riches
In March Ford handed the chief exec $56.5 million in stock and then, a month later, announced that Mulally last year pulled down an additional $26.5 million in annual pay. That amounted to 910 times the pay of entry-level Ford workers. They had been making, ever since a 2007 concessions pact, just $14 an hour.
United Auto Workers president Bob King calling Mulally’s spring-time take-home bonanza “morally wrong.”
Added another UAW leader representing Ford’s Canadian workers: “It’s unconscionable that a CEO gets paid this much money as a result, quite frankly, of shrinking a company into profit.”
3/ Larry Ellison: Loving that Real Estate
That piece of change added less than two-tenths of 1 percent to Ellison’s $39.5 billion personal fortune, the world’s fifth largest.
Why does Oracle, at this point, bother ladling still more loot on Ellison? His continuing rewards, says the Oracle board compensation committee, rest on a “subjective evaluation of Mr. Ellison's performance, the unique contributions he makes to Oracle as its founder and various other factors.”
Among those “various other factors” may be the annual upkeep of the at least 15 personal residences Ellison owns. That upkeep may be getting to the billionaire. Or maybe just boredom. This past fall Ellison put up for sale a 6.9-acre home and horse farm combo he owns in Northern California.
Ellison is asking $19 million for the property. He paid $23 million for it in 2005. But the $4 million haircut he’s now facing won’t be a big deal. The loss amounts to around one-hundredth of 1 percent of his fortune.
2/ Don Blankenship: Prepping for a Comeback
Earlier this month, federal regulators agreed. They found “systematic, intentional, and aggressive efforts” to flout basic safety regulations. Under Blankenship, Massey managers kept two sets of books, one accurate for internal use and another fake for regulators.
Says the top federal mine safety official: “Every time Massey sent miners into the UBB Mine, Massey put those miners’ lives at risk.”
That risk taking paid off handsomely for Blankenship. He pocketed $38.2 million from 2007 through 2009, after $34 million in 2005, and retired this past December with a $5.7 million pension, $12 million in severance, another $27.2 million in deferred pay, and a lush consulting agreement.
What about the families of the lost miners? Federal prosecutors have just reacheda settlement with Alpha Natural Resources — the company that bought out Massey this past June — that will provide $1.5 million to each family.
Blankenship could still face criminal charges. But we'll more likely see him back in the mine business. The mega millionaire retiree has signed Kentucky state incorporation papers that identify him as the president of a new company that calls itself the McCoy Coal Group Inc. Who says Blankenship has no heart? “McCoy” turns out to be his mom’s family name.
1/ Mark Pincus: Reaping What He Sows in FarmVille
The 45-year-old Pincus had spent the previous four years building up Zynga — and an awesome buzz on Wall Street. Analysts were predicting that Zynga’s initial public stock offering might be the biggest IPO blockbuster since Google.
Some analysts even floated an incredible $20 billion figure for Zynga’s total corporate net value. The Pincus personal net worth? Forbes put that at $2 billion.
This past March, in a preview of the IPO bonanza to come, Pincus would sell off a chunk of his Zynga shares and clear a neat $110 million.
This lucrative sale in no way loosened the Pincus lock-grip over Zynga. The Harvard MBA had structured the company’s stock to make him the only owner of Zynga’s “Class C shares,” stock that has 70 times more voting power than Zynga’s regular shares. Elsewhere in the high-tech industry, special shares typically carry only ten times the voting power of regular shares.
But then this fall things started unraveling.
High tech start-ups typically attract talent by offering shares of stock in their new concern, and Pincus had done just that with Zynga. But Pincus had apparently concluded, with the big IPO pending, that he had given away too many shares.
In early November, the Wall Street Journal revealed that Zynga management haddemanded that various employees “give back” their stock “or face termination.”
No comments:
Post a Comment