The compensation research firm Equilar recently compiled data about chief executive pay at 200 companies that filed their proxies by March 28 and had revenues of at least $6.5 billion. And the data illustrates Mr. Hodgson’s point. It shows that average compensation for chief executives who had held the job at least two years rose 5 percent in 2007, to $11.2 million (If new C.E.O.’s are counted, that number is $11.7 million). Even though performance-based bonuses were down last year, the value and prevalence of discretionary bonuses — ones not linked to performance — were up. A result is that C.E.O.’s who have held their jobs for two years received an average total bonus payout of $2.8 million, up 1.1 percent from 2006. ...
Even when the credit crisis cost financial chiefs their jobs, it did not hurt their paychecks. Mr. O’Neal at Merrill and Charles Prince at Citigroup both walked away with fortunes. Washington Mutual, meanwhile, decided that write-offs would not count when it calculated performance-based bonuses, a decision that one compensation expert referred to as calculating batting averages without counting strikes. ...
Many shareholders were aghast last year when Angelo R. Mozilo, who earned $100 million at Countrywide Financial in 2006, successfully argued that Countrywide should pay the taxes that were incurred that year when his wife accompanied him to business functions on the corporate jet.
The directors are elected by the stockholders via proxies — those things you get in the mail and then throw away. Thus, in effect, the board is selected by top management, usually by the C.E.O. himself. Once a director is on the board, there is only the slightest of chances that he will leave, except for death or old age or illness.
To be a member of the board of a large company is a little example of paradise. You get good pay for just sitting in a meeting and listening to summary presentations. You get insurance and a pension. You can go to luxurious resorts and play golf. What the heck are security lines? You fly in private jets.
Sometimes, you get stock options, and these can be meaningful. In other words, it’s nice to be the director of a public company. How do you keep your job? You are really nice to the person who put you in that job. You don’t know the little stockholder in Muncie who might have 500 shares. But you do know the guy who repeatedly reappoints you for your post at the directors’ table. The little stockholder cannot do a thing for you, but the boss can.
When it comes to compensation, you want him to be really happy. It doesn’t matter how well he’s doing, unless he’s wreaking havoc and you may be sued. It doesn’t matter if the stock price has languished. You want what’s best for No. 1, and that means what’s best for Mr. Big.
You hire a compensation consultant to work out pay and options and deferred pay and retirement and every other good thing for Mr. Big. The compensation committee knows that its hiring and rehiring are dependent on Mr. Big’s being happy. So it crafts a package that will keep him happy — and throws in a few goodies for the directors.
It’s called the “boardroom buddy system,” and it works perfectly once you are on the inside. You just have to make sure you stay on the inside. And to do that, you don’t upset the apple cart with tacky questions about what the C.E.O. is doing or why he is paid so much. ...
Now we come to a sad fact about modern American life. It was brought up by the Rev. Dr. Martin Luther King Jr., who often said that America, through its technology, has made of itself a neighborhood, but not a brotherhood. It is a lot worse now. The nation has become, to some at the top, far more of a looting opportunity than a family.
I am not sure where this has come from — maybe from media that glamorize wealth and high-end consumption, maybe from poor moral training. But one thing is clear: Current law does not give shareholders or regulators any tools to rein in executive greed. There simply is no legal “cause of action” for pay packages that, however obscene, are approved by the board and disclosed to shareholders. Congress could change this. So could the Securities and Exchange Commission.
Meanwhile, the average earnings of typical workers have failed to keep up with inflation in four of the past five years. According to the economists Emmanuel Saez of the University of California, Berkeley, and Thomas Piketty of the Paris School of Economics, average incomes in the highest-earning 1 percent of the United States grew 11 percent year-over-year between 2002 and 2006. Incomes in the bottom 99 percent grew by 0.9 percent annually over the period. This year looks bad, too.
This polarization is producing a pattern of income distribution rarely seen outside Africa or Latin America, and unheard of in the United States, at least since the gilded age. In 2006, the 15,000 families in the top 0.01 percent of the income distribution — earning at least $10.7 million apiece — pocketed 3.48 percent of the nation’s total income, double their share in 1993.
Introduced in the 1970s, L-1 visas are non-immigrant visas, which allow companies operating in both the United States and abroad to transfer certain classes of employees into the United States for up to seven years. The L-1 visa is more limited than H-1B visas in several ways: the L-1A is only for managers and executives, or for employees with specialized knowledge that cannot be found in the U.S. ...
However, it is the ways that L-1 visas are more lax than H-1Bs that have drawn the ire of some interest groups. L-1 visas have no annual cap and no requirement than that the visa-holder is paid the prevailing wage for their role. "With H-1B visas, there is no requirement that you have to prove you aren't displacing a U.S. worker. You only need to assure regulators that you're paying them a fair wage. But the L-1 visa doesn't require this and I've heard of situations where an H-1B visa holder might be paid $42,000 for a job, but the L-1 visa [holder] only making $12,000," said Meltzer.
Though they receive less media coverage, usage lists show that L-1 visas have not flown under the radar of large tech employers. According to the U.S. Senate, IBM was the third biggest user of L-1 visas in the 2006 fiscal year, receiving 1,237. Intel received 394 L-1 visas; HP received 316; Oracle received 176 and Microsoft received 169.
The visa announcement brought renewed calls from American technology companies to raise the annual limits. On Thursday, senators led by John Cornyn, Republican of Texas, introduced a bill that would raise the H-1B cap to 145,000 visas each year through 2011. It would also allow businesses to use, over a three-year period, some 150,000 visas that were available in past years but were never issued. ...
Labor organizations say that H-1B immigrants have depressed wages for American technology workers. Some employers have protested that they were crowded out of the visa pool by the Indian outsourcing companies. A Web site was started in January by American technology workers who said they had been driven from jobs by H-1B immigrants. About 150 members have posted their stories on the site, hireamericansfirst.org. ...
It’s not that you can’t find Americans,” a 55-year-old American technology worker in Florida, who was contacted through the Web site, said in an interview Thursday. “It’s that you can’t find Americans at the price you can get away with paying an H-1B worker.” A computer systems administrator with 25 years of experience, he said he did not want to have his name published for fear of jeopardizing a job he recently found after a four-year search.
In the fall of 2000, Bloch taught a programming course that was a prerequisite for a computer science degree, for which enrollment was 40 percent women. In the current academic year, there is only one female computer science major, he said.
The two allege that their retirement benefits were cut because of their age, in violation of the federal Age Discrimination in Employment Act and the Employee Retirement Income Security Act. The lawsuit alleges that for years, the company's pension plan offered benefits calculated on a formula based on an employee's pay and years of service. The complaint says that when Solvay changed to a system based on credits assigned in a retirement balance account, known as a "cash balance" pension plan, the initial balances did not reflect the value of the plan under the previous system.
These purveyors of customized interiors, called "completion centers," are increasingly sold out for years to come as demand for transport-size personal aircraft has soared from a handful a year to dozens. That means lots more work designing and installing mother-of-pearl vanities, gilded ceilings, exotic wood cabinets, hand-made carpeting, multihead showers -- even throne rooms and gyms. Some vendors design the china, crystal and sterling silver that travel on board, and a few have installed missile defense systems on the aircraft.
"We have more work than we can handle," says Jon Buccola, chief executive officer of outfitter Greenpoint Technologies Inc. of Kirkland, Wash. Greenpoint, which specializes in interiors on new Boeing 737 business jets, has won $100 million in new business since the start of the year and is talking to a potential client who won't even get his or her new aircraft until 2014, he says.
Once a cottage industry that primarily retrofitted former airline planes, many of these completion centers now are focusing on new VIP planes, called "green aircraft" because they come out of the factories unpainted and covered in a greenish protective coat. The firms spend months -- or even years -- designing and installing the interiors at prices that rival the cost of the aircraft themselves. Demand is so strong that new players are joining the handful of established centers in the U.S. and Europe, despite a shortage of engineers who are familiar with this arcane work and the specialized craftsmen who build the furnishings, do the upholstery and construct entire galleys and lavatories by hand. ...
"The overall economy at the upper sphere is doing very well," says Jerry Gore, chief executive officer of Gore Design Completions Ltd. in San Antonio, Texas. His growing firm, which he owns with his ex-wife Kathy Gore, the president, is in talks with more than 30 prospects for assignments as far out as 2015, he says.
“If you’re successful, you should be rewarded. But if you’re a Wall Street CEO today, it doesn’t seem to matter whether you’re doing a good job or a bad job for your shareholders and workers: You’ll be rewarded either way,” Obama said in prepared remarks. He lauded McCain’s recent show of disgust with executive pay, but criticized him for not supporting the Shareholder Vote on Executive Compensation Act, which would give shareholders the chance to signal their displeasure with executive pay with a nonbinding vote. “When he’s had the chance to do something about this problem, he’s opted for continuing the do-nothing approach of the Bush years,” Obama said.
McCain has stepped up his criticism of rising executive pay at a time when many corporations have posted steep losses. In the past, McCain has supported measures to force companies to count stock options grants as company expenses for accounting purposes. “It’s outrageous that someone who is the head of Bear Stearns cashes in millions and millions of dollars in stocks,” McCain said last weekend. “And I think it’s unconscionable when the guy who apparently is the head of Countrywide and his co-conspirators make huge amounts of money while Americans are facing the threat of losing their own homes.”
Most companies, not surprisingly, aren't so amenable to the idea. The core argument against the movement is that CEOs get paid a market rate and say-on-pay votes undermine the very nature of corporate governance — a board of directors charged with luring and keeping the best talent. In the rebuttal statements to say-for-pay proposals found in their annual proxies, companies lay out all sorts of counter-arguments. IBM says there's no way that shareholders can know what's an appropriate pay practice since they're not privy to competitive information like which executives are receiving other job offers. Coca-Cola stresses that shareholders already have a way to deal with pay practices they find unpalatable: don't vote for members of the board when they come up for re-election.
The findings signal a sea change in the attitude of the medical establishment toward universal care. Throughout the 20th century, U.S. doctors have been among the fiercest and most influential opponents of national insurance, citing concerns of a meddlesome bureaucracy, a loss of independence, and lower reimbursements. Lobbying by the AMA and other professional groups scuttled efforts to introduce universal coverage by several Presidents, starting with Calvin Coolidge and continuing through Franklin Roosevelt, Harry Truman, Jimmy Carter, and Bill Clinton. Back in 1948, after Truman was elected in part on a platform of compulsory health insurance, the AMA urged its members to "resist the enslavement of the medical profession." That attitude held constant for decades.
But with so many Americans uninsured, doctors are finding that the lack of universal coverage is making it more and more difficult for them to do their jobs. "Across the board, physicians feel that our fragmented and for-profit insurance system is obstructing good patient care, and a majority now support national insurance as the remedy," says Dr. Ronald Ackerman, associate director for the Center for Health Policy-Professionalism Research at Indiana University School of Medicine and a co-author of the study.
Other major findings:
Few will be surprised to discover that doctors in high-expenditure institutions are typically paid on a fee-for-service basis, which means they earn more if they do more. Mayo Clinic doctors, by contrast, are on salary and have no financial incentive to do anything more than the patient clearly needs.
Eventually, she sought care at a hospital 30 miles away. By then, however, it was too late. Both she and the baby died. You may think that this was an extreme case, but stories like this are common in America.
Back in 2006, The Wall Street Journal told another such story: that of a young woman named Monique White, who failed to get regular care for lupus because she lacked insurance. Then, one night, “as skin lesions spread over her body and her stomach swelled, she couldn’t sleep.”
The Journal’s report goes on: “Mama, please help me! Please take me to the E.R.,” she howled, according to her mother, Gail Deal. “O.K., let’s go,” Mrs. Deal recalls saying. “No, I can’t,” the daughter replied. “I don’t have insurance.” She was rushed to the hospital the next day after suffering a seizure — and the hospital spared no expense on her treatment. But it all came too late; she was dead a few months later.
The Alliance has been losing members due to retirement, job loss and employee financial difficulties. This web site receives an average of 40,000 visitors a month.
Tough economic times are obvious; however, we simply can not go on or take employee advocacy to higher levels if we don't build our dues paying membership. It is not just this web site: It is an office and an organization that is at stake. Our staff of 1 full time, 1 part time and volunteers/members are dedicated to building this organization; but it is up to YOU to see that we are able to keep the office open and the organization financially viable. We need to become financially independent--We can not continue to rely on being financed by non-IBM CWA members. IBM employees need to support their own organization!
Frankly if IBM employees do not see the value of this employee organization then the future of our work is in jeopardy.
Please consider joining the Alliance@IBM as a member for only $10 a month--the cost of a few Starbuck's coffees. Your dues and involvement help the Alliance with the following:
We also have the expense of keeping an office up and running: Rent, Office supplies, fax, phones internet access and mailings of organizing materials; such as newsletters, flyers and brochures.
We believe Alliance@IBM has, by its very existence; given IBM Corporate Mgmt pause, during their anti-employee actions.
The bottom line is that if we are NOT here, then IBM Corporate Management has the field. There will be some who say that employees do not want representation through an employee organization or a union. Now is the time: Prove them wrong or prove them right.
The printer folks leaving in most localities are already assigned to a printer only manager in their own branch. In my old locality they have already been locked out of IBM sub offices even though the transition does not occur till june 1. The one point they kept making on conference calls is we would see the difference between working for a multi billion dollar business and working for a multi million dollar business. This was usually the answer if we asked about spending any money. As printer folks were getting bupkiss for raises already and no respect already it seemed a really good time to make my exodus. Just a shining example of the new IBM.
As I chose to not have a retirement luncheon ( My quarter century was a lunch meat tray in the office if I insisted on having one. because no money in the budget for printer folks that year) I also did not get retirement letters or a retirement gift. I was told they had done away with retirement gifts even though I knew they had not. Showed me how appreciated my 30 years including area specialist for the Series One were. Also showed me what a backstabbing liar and hypocrite the printer manager out of Richmond is.
No problem though, Ill buy my own cheap clock for my mantle and tell folks to buy Xerox and Hp printers, anything BUT Ibm. tic toc tic toc. I guess this is what happens when you refuse to kiss anyone's butt. Good luck to all. Hope the printer folks are smart enough to unionize right away in the new company. That would be GREAT. And the ONLY way they will stop their abuse.. -Exodus 2007-
Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC. Some sample posts follow:
“The new generation of straight-from-business-school managers tends to be as convinced of their own indispensable contribution as they are unimpressed by the contributions of people they’ve never understood or worked with. Because they don’t have personal relationships with less-educated people and they don’t really work with them, too many contemporary managers and executives have no respect for those who report to them.:
"Without respect for subordinates, executives find it quite easy to think of employees as an expense to be managed. In that mindset, downsizing is a good thing . . . When senior managers are blind to the value of subordinates and to their dependence on them, they are also blind to the high cost of thinking of employees simply as costs.”
The phrase "when senior managers are blind" put me right back in the spot when I challenged Lou in Austin to revisit the proposition of removing us 40-somethings from access to the old retirement program. As I looked up from reading my question to him, I saw in his eyes not hatred or rage or any emotion at all, but the blank look of a man who wasn't there. I thought them and still shiver now to think I'm looking into the void of a robot.
Lou has never worked a production job nor managed a group of sales people. His whole career has been spent manipulating money. I believe he fits the above description to a "T".
Now then ABC, I saw "Breach" recently too and I'm lost as far as characterizing Hanssen's behavior. Split personality maybe: one minute sexed up like Bill Clinton in heat and next minute pious as a pharisee. Is Lou a member of Opus Dei? That would be a hoot.
When most of HR was sold off to Fidelity there was some rumbling from some of them about Lou charging off weekends with hookers in NYC on his TEAs, but it quickly died away.
As far as Sam goes, I'm not as sure. Since he's a graduate of the ERL program, he's made a Faustian deal for his life here on earth. I'd be interested to hear the opinions of others who been near to him.
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