Angry Shareholders Confront a Bloated CEO (AlterNet)

[marmar]

Angry Shareholders Confront a Bloated CEO

By Sam Pizzigati, AlterNet. Posted June 2, 2007.



At a recent Qwest annual meeting, shareholders expressed anger over management's salaries and perks. Their frustration -- and management's rationalizations -- tell us a great deal about profits, power and the state of corporate America today.

Qwest, the giant Denver-based phone company, is riding high these days. The telecom came before shareholders this past Wednesday, at the company's annual meeting, with nearly $600 million in 2006 profits -- and a whopping share price hike -- to happily report.

Who deserves the credit -- and reward -- for that stunning "performance"? Give the brass ring, says a grateful Qwest corporate board, to company CEO Dick Notebaert.

In 2006, Qwest bestowed upon Notebaert $1.1 million in salary, $4.1 million in bonus, $760,000 for country club memberships and assorted other perks, and stock grants and option awards worth $16.7 million.

Over the course of the year, Notebaert also collected $18.4 million cashing out stock options he picked up in previous years and, to top things off, saw $8.4 million of his previously awarded stock grants vest their way into his personal portfolio.

Depending on how you define what gets counted in annual CEO pay, Notebaert in 2006 made somewhere between $16.5 million (Denver Post) to $33 million (Minneapolis Star Tribune).

...(snip)...

Other shareholders at the Qwest annual meeting had a more specific take on the elements behind the company's latest profit upsurge.

Under Notebaert, pointed out a Salt Lake City widow of a retired Qwest employee, retirees have had their life insurance coverage slashed from "a full year's salary to $10,000." Healthcare benefits have also been capped.

Workers still on the job have felt some squeezing, too. A pending federal lawsuit, for instance, is charging that Qwest call center workers have been forced to work overtime without getting "properly paid."

Schoolteacher Linda Baggus asked Notebaert, at Wednesday's meeting, if he'd be willing to plow $10 million from his CEO pay to restore full life insurance coverage for Qwest retirees.

"No," came Notebaert's answer.

That wouldn't be the annual meeting's only piece of negativity. Four shareholder reform resolutions, all designed to put the brakes on "runaway CEO pay," went down to defeat after Qwest management mobilized against them. ......(more)

The complete piece is at: http://www.alternet.org/workplace/52432/

[Rydz777]

1. Corporate governance is a shambles.

Theoretically (and the theory is a long way from reality), the stockholders own the company, and the Board of Directors represents the stockholders interests in overseeing management. In fact, becoming a CEO means you can pillage the company to your heart's desire until you finally do something so egregious that you find yourself in court. Just be a little careful and at worst you will sail away with your golden parachute.