wpe50.jpg (1913 bytes)     TigerSoft News Service    5/1/2008      www.tigersoft.com    

                    OVERPAID CEOs
                           ELECTRONICS TO FUEL AND SNEAKERS
                                      MUCH MORE EXPENSIVE.

                                                                               by William Schmidt, Ph.D. 
wpe4F.jpg (33251 bytes)  

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                          GREEDY and OVERPAID CEOS
                                               NOT TO MENTION THEIR WORKERS AND CONSUMERS!

                           wpe129.jpg (35677 bytes)
http://www.cartoonstock.com/directory/e/emo.asp  )

It's all too easy to find examples of grossly overpaid American CEOs
                      who choose to grab all they can while running their companies into
                      the ground.  All you have to do find such companies is look for stocks
                      that are down 50%, 75% or even 90% or more over the last 2-5 years.
                      Seldom are the CEOs who ruined the company and its stock fired.
                      And if they are let go, they typically receive  "golden parachute" worth
                      millions.   See the examples of Colt, Pfizer, MER, Citigroup, Starwood...
                            You can readily go to Yahoo Finance and see for yourself how much
                       these greedy SOBs are paying themselves for their failures in leadership. 
                       To make matters worse, most dumped thousands and thousands of shares
                       of their companies' stocks, which they got as "bonuses",  before the
                       bad news came out and dropped their stock even more.  See the cases
                       of Citigroup and Washington Mutual

                            Executive pay and bonuses are only part of the their compensation.
                         The average American worker cannot begin to imagine how plush the
                         world of CEOs is with their company jets, chauffeured cars, corporate
                         townhouses, retreats, apartments, golf club memberships, penthouse
                         seats for ball games,  food and catering, butlers and personal assistants. 

                            Over the next week or so, TigerSoft will give more examples.  This is a
                  problem that shows no signs of going away.  CEOs seem to be a special class
                  of humanity, all greed and arrogance.  The worse they are for their shareholders,
                  the more they grab all they can!  And their Board of Directors are happy to
                  consort in the looting.  It's high time Board of Directors automatically have
                  labor representation on their Board.  The European experience shows it works.
                  (Google "mitbestimmung" (or co-determination) and translate it. )

Ever Wonder Why US Health Insurance Is So Expensive?

Absurdly high health company executive pay is a big part of the problem.  
               There are about 23 big health companies.  Using United Healthcare as an
                example, their CEO was paid about $324 million over a five year period.  For the 23 health
                 insurance companies,  that's about $7 billion just for just 23 CEOs.  If you add in all the
                Vice Presidents and the "fat cats" on these companies' Boards of Directors, the
                5-year cost is probably about $30 Billion just for these companies.   If their pay was
                reduced by 80% in a public national health insurance scheme, that would go a long
                way toward providing more affordable health care.  Let's say a government run health
                insurance program costs $10,000 for each family.  
This alone would pay the health
                insurance for more than 500,000 American families a year.   The same argument
                can be made for the high costs of many others goods and services. 


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                   It's clear to most Americans that health insurance profits depend upon reducing
                the amount of health care provided the millions who are insured and not insuring
                those who need health care the most.   So, when a health insurance CEO gets a
                "merit" bonus for exceeding profit goals, it's obvious the American health system
                 is not meant to provide health care as much as it is meant to benefit those who
                 run these companies in ways most working people cannot even imagine, so garish
extravagant are these CEOs' life-styles and senses of entitlement.
  • United Health Group
    CEO: William W McGuire
    2005: 124.8 mil
    5-year: 342 mil
Forest Labs
CEO: Howard Solomon
2005: 92.1 mil
5-year: 295 mil
Caremark Rx
CEO: Edwin M Crawford
2005: 77.9 mil
5-year: 93.6 mil
Abbott Lab
CEO: Miles White
2005: 26.2 mil
5-year: 25.8 mil
CEO: John Rowe
2005: 22.1 mil
5-year:57.8 mil
CEO: Kevin Sharer
2005:5.7 mil
5-year:59.5 mil
CEO: Edwin Ludwig
2005: 10 mil
5-year:18 mil
Boston Scientific
2005:38.1 mil
5-year:45 mil
Cardinal Health
CEO: James Tobin
2005:1.1 mil
5-year:33.5 mil
CEO: H. Edward Hanway
2005:13.3 mil
5-year:62.8 mil
CEO: Henri Termeer
2005: 19 mil
5-year:60.7 mil
CEO: Michael McAllister
2005:2.3 mil
5-year:12.9 mil
Johnson & Johnson
CEO: William Weldon
2005:6.1 mil
5-year:19.7 mil
  • Laboratory Corp America
    CEO: Thomas MacMahon
    2005:7.9 mil
    5-year:41.8 mil
Eli Lilly
CEO: Sidney Taurel
2005:7.2 mil
5-year:37.9 mil
CEO: John Hammergen
2005: 13.4 mil
5-year:31.2 mil
CEO: Arthur Collins
2005: 4.7 mil
5-year:39 mil
Merck Raymond Gilmartin
2005: 37.8 mil
5-year:49.6 mil
PacifiCare Health
CEO: Howard Phanstiel
2005: 3.4 mil
5-year: 8.5 mil
  • Pfizer
    CEO: Henry McKinnell
    2005: 14 mil
    5-year: 74 mil
  • Well Choice
    CEO: Michael Stocker
    2005: 3.2 mil
    5-year: 10.7 mil
  • WellPoint
    CEO: Larry Glasscock
    2005: 23 mil
    5-year: 46.8 mil
CEO: Robert Essner
2005:6.5 mil
5-year: 28.9 mil

l                                                     "Scratch My Back..."

             Today, the NY Times re-ran an article, "Millions for (CEO) Moochers"
           that first appeared in 2004.   The average CEO of a major corporation
           is paid $10.8 million a year.   The company's Board of Directors
           approve this pay, so that they, too, can get a piece of the corporate
           pie.  Consultants are then hired to show that such pay is necessary.

              The purity of their greed is quite amazing.  It's a throw-back to
           the Gilded Age of Monopolies, Robber Barons, no unions and the
           50-hour work week.  It's not surprising that real wages for American
            workers have been declining since 1971.     

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"While Disney artists bring their imaginations to life through animation, Disney
            executives are living a lifestyle that animators can’t even begin to imagine. The Wall Street
           Journal recently reported that Disney chief executive Bob Iger received a 7% pay increase
           in 2007 for a total financial compensation of $27.7 million. According to the company’s
           proxy statement, the breakdown is as follows: $2 million salary, which remained the same
           as 2006; a $13.7 million bonus, which was a decrease from his $15 million bonus in ‘06;
          stock awards totaling $7.9 million, and $740,000 for personal air travel, security and a car
          benefit. Other Disney execs who earned healthy sums were CFO Thomas Staggs ($9 million),
          General Counsel Alan Braverman ($7.9 million), executive vp of human resources Wesley
          Coleman ($2.7 million) and executive vp for corporate strategy Kevin Mayer ($2.6 million).
  ( http://www.cartoonbrew.com/disney/the-salaries-of-disney-execs   ) 

We start by looking at an articles written in 2005.   I have added
           relevant materials that were found on the internet.

                         In 2005, Michael Brush of MoneyCentral.MSN wrote:
(Source: http://moneycentral.msn.com/content/p125120.asp )
Consider Michael Ovitz. Although stockholders sued, the one-time Hollywood superagent
                   gets to keep the $140 million he was paid for 14 months of work as president at Walt
 (DIS, news, msgs). A Delaware judge ruled in mid-August that Disney's board didn't
                   breach its responsibilities in awarding the huge severance package.   While the Ovitz payout may
                   have been legal, it's the type of corporate behavior that costs investors millions of dollars every year.
                   And it's not just a few spendthrift companies throwing good dollars after bad leaders. We scoured
                   corporate regulatory filings and found plenty of examples of overpaid underachievers in executive suites.
                   Ultimately, we came up with a list of the five most overpaid bad chief executives..." 

                         I want to make clear that I could just as easily have taken up the "obscene executive payouts"
                    at Warner Music.  or  ex-Disney boss Michael Eisner's fantasyland pay of  $285 million for
                   running his company nearly into the ground, with earnings falling 63% from 1996 to 2004.

  • Top honors go to Gary Smith at Ciena (CIEN, news, msgs). His shareholders have been virtually
    wiped out -- losing 93% in the past four years. His compensation over that period: $41.2 million.  The stock fell
    from the equivalent of 1000 in late 2000 to 11 in 2005.
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                                      GARY SMITH'S RECENT INSIDER SELLING
    Declared Holdings
    Relationship/Company Reported Shares Value
    President & Chief Executive Officer
    Ciena Corp
    Roster, Transactions
    04/23/2008 25983 as of: 04/23/2008
    as of: 04/30/2008


    * Indicates shares held indirectly

    Transactions (All Holdings)
    Date Shares Stock Transactions
    04/23/2008 3,840 CIEN Open Market Sale
    proceeds of $129,600.00
    04/23/2008 3,840 CIEN Exercise of Stock Options
    at cost of $63,436.80
    04/11/2008 3,840 CIEN Open Market Sale
    proceeds of $117,964.80
    04/11/2008 3,840 CIEN Exercise of Stock Options
    at cost of $63,436.80
    03/27/2008 19,200 CIEN Open Market Sale
    proceeds of $597,696.00
    03/27/2008 15,280 CIEN Exercise of Stock Options
    at cost of $252,425.60
    03/27/2008 3,920 CIEN Exercise of Stock Options
    at cost of $78,204.00
    03/24/2008 3,840 CIEN Open Market Sale
    proceeds of $116,236.80
    03/20/2008 489 CIEN Open Market Sale
    proceeds of $14,278.79
    01/03/2008 3,840 CIEN Open Market Sale
    proceeds of $121,113.60
    01/03/2008 3,840 CIEN Exercise of Stock Options
    at cost of $76,608.00
    12/20/2007 8,791 CIEN Open Market Sale
    proceeds of $301,179.65
    12/20/2007 8,791 CIEN Open Market Sale
    proceeds of $301,179.65
    12/20/2007 20,000 CIEN Award of Stock
    *** Undefined Type ***
    12/18/2007 69,000 CIEN Award of Stock
    *** Undefined Type ***
    12/18/2007 23,000 CIEN Award of Stock
    *** Undefined Type ***
    12/18/2007 57,000 CIEN Award of Stock
    *** Undefined Type ***
    12/17/2007 3,840 CIEN Open Market Sale
    proceeds of $133,056.00
    12/17/2007 3,840 CIEN Exercise of Stock Options
    at cost of $76,608.00
    12/03/2007 3,840 CIEN Open Market Sale
    proceeds of $167,846.39

  • Jure Sola, the CEO and chairman at Sanmina-SCI (SANM, news, msgs)
    collected $26.4 million during the past four years while Sanmina shares fell 78%. The bulk of Sola's pay came
    in the form of a performance bonus of $19.9 million, paid for hitting one recent quarter's targets.  "According
    to a blog post by Business Editor Bolaji Ojo, posted on EETimes, Jure Sola of Sanmina-SCI Corp. is
    holding tightly to his job despite a litany of problems. The market in which Sanmina-SCI plays today
    is not the one Sola started out leading in 1991."

    More than 16 years after assuming the position of chairman and CEO, Jure Sola of Sanmina-SCI is holding tightly
    to his job despite a litany of problems, including poor performance on the equity market, five years of net losses,
    negative revenue growth, weak margins, a series of so far unremarkable turnaround and restructuring efforts and
    Securities and Exchange.  http://www.evertiq.com/news/read.do?news=8023&cat=1
    Campaign contrinutions: 2001-2006 - $6,000 to John McCain and National Republican Congressional Committe.
    (Source: http://www.newsmeat.com/fec/bystate_detail.php?zip=95070&last=SOLA&first=JURE )

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                                                                 STEADY RED DISTRIBUTION
                                                                    AND INSIDER SELLING.

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  • Sun Microsystems (SUNW, news, msgs) paid Scott McNealy, its CEO,
    chairman and founder, $13.1 million a year over the past four years (2005), even as Sun's shareholders lost 76%
    of their money.  Since then, the stock has gone nowhere and is under heavy red Selling distribution and insider selling..

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  • wpe115.jpg (9286 bytes)  Shares of supermarket chain Albertson's (ABS, news, msgs)
    fell 39% over the past four years. Despite this dismal record, Albertsons CEO and Chairman
    Larry Johnston collected a total of $76.2 million in that time.
    Education    College: Stetson University BBA  ' 72
                                                     $105 Million Dollar Man
    Larry Johnston, Albertsons Inc. former CEO, will get a multimillion-dollar "golden parachute" when the Boise grocery
    chain is sold to SuperValu Inc. and its buyout partners.

    Here's what Johnston will receive in cash, stock, health and other benefits, along with income tax reimbursements
    on his "golden parachute":

    • $8.85 million for severance of three times his base pay.
    • $482,212 for his pro-rated annual bonus.
    • $35,818 for 36 months of health and other benefits.
    • $50,000 for outplacement services.
    • $100,000 for relocation expenses.
    • $159,208 for fringe benefits.
    • $20.4 million for his life annuity, if he takes it as a lump-sum payment.
    • $627,111 from the company's long-term incentive plan.
    • $3.7 million from the company's deferred-compensation plan.
    • $28.9 million if he cashes in his 1,100,461 stock options at $26.29 each.
    • $29.3 million if he cashes in his 1,114,753 shares of stock at $26.29 each.
    • $12.9 million to pay the income taxes on the package.

                            "Deception, Lies, & Deceit. It might as well be Albertsons new motto." "Since Albertsons
    couldn’t win the Grocery Strike, they have come up with a plan to circumvent the agreement they made with their
    employees.  Albertsons has decided to sell your local store -- to themselves.   They will then close down your
    Albertsons, get rid of all of the current employees, and open under a new name.  This “new” store will hire workers,
    without training, union benefits, or contracts. Their object is to make more money by ridding themselves of their
    Union employees. The same hard working employees they signed a binding contract with just last year. The very
    people that make going to Albertsons such a great shopping experience. Albertsons is hoping that some new paint,
    and a new name will fool you and your friends into complacency. "
    ( Source: http://www.stopalbertsonsnow.com/ )

    "Albertsons CEO Larry Johnston's $8 million raise in 2005" Aug 4, 2006 ...
    Larry Johnston is the biggest idiot ever, he is the reason Albertsons is going down.
    He doesnt have the slightest idea on how to run a grocery chain..."

  • Under CEO Peter Dolans watch at Bristol-Myers Squibb (BMY, news, msgs),
    shareholders have seen the stock decline by 48% over the past four years. Dolan took home $41 million. 
    In 2000 it was 80, now it is 20.    Peter Dolan was named CEO of Bristol-Myers Squibb (BMY) on
    May 1, 2001,  and was the seventh CEO since the company was founded in 1887. He was elected chairman
    of the Board of Directors on September 12, 2001. Dolan joined Bristol-Myers Squibb in 1988 in the over-the-
    counter products division.  Subsequently, he held senior leadership positions in the company’s various
    businesses, including consumer medicines, nutritionals, medical devices and pharmaceuticals. He became
    president of the company and a member of its Board of Directors in January 2000.    On September 12, 2006,
    a federal monitor urged for Dolan to be removed due to a mishandled attempt to settle a patent dispute
    over the drug Plavix. Later on the same day, it was announced that Dolan would step down as CEO.[1]    Dolan
    was replaced by James Cornelius, who was selected by the BMS board to serve as interim CEO. In addition,
    he has relinquished his positions on the Board of American Express and the presidency of the Pharmaceutical
    Research and Manufacturers of America. (Source: http://en.wikipedia.org/wiki/Peter_R._Dolan )

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