Wednesday, April 06, 2005

CEO Pay Watch -- A Continuing Crime

Riches and poverty. The one produces luxury and idleness, and the other low standards of conduct and workmanship.
Plato (428? BC - 347? BC), Greek philosopher

The next time you rent a video think about who you are supporting. John Antioco, CEO of the Blockbuster video rental chain, received $51.6 million in total compensation. Last year the video rental company lost $1.25 billion and now announced plans to lay off 300 employees.

Half of his salary would last him a lifetime and the other half could support numerous families and help keep the economy going. After reading this in this week’s Time magazine, I will no longer go to Blockbuster. I will go back to my second cousin’s video shop, despite the fact he doesn’t hesitate to charge me for late fees.

CEOs overall enjoyed a 12% increase over last year, according to the New York Times. The chief executives at 179 large companies that had filed proxies last week were paid about $9.84 million.

The entire CEO and executive level salary structure is obscenely wrong. Why not put the money back into the company? When those raining days come, rather than laying off workers, keeping them would inspire loyalty. Or, how about investing the money into the employees with bonuses to their 401Ks and open ones for those who don’t have one.

On the topic of retirement, CEOs also receive million dollar pensions in retirement, so they don’t even have to spend the millions they grabbed while operating the company. Again, according the New York Times, Henry A. McKinnel Jr., the chairman and chief executive of Pfizer will be paid approximately $6.5 million a year after he retires. Lee Raymond of Exxon can expect $5.9 million a year in retirement. And, the CEO of Lockheed received a $31.5 million lump-sum payment as his retirement present.

This aspect of capitalism seems so far out of whack to inspire communism.

3 comments:

Pirate said...

Don't even get me started on pharmaceutical companies. As to Blockbuster ... I have been going there and will think about your news; however, I've always found it difficult to keep track of which company I should be supporting (or would be allowed to be supporting) if I did the research and made sure that they were in line with all my political, social, and other beliefs. I start to get depressed, too, because I realize that the world is full of crooks and liars, all out to make sure they and their shareholders get the most possible money, and screw the little consumer.

Anonymous said...

From www.shortnews.com, a follow up to the recent Blockbuster lawsuit in regard to the mislead "No More Late Fees" Campaign

"Blockbuster Video Pays the Price for Alleged Shady Business Practices
Blockbuster Inc. has settled with 47 states and the District of Columbia to fend off complaints of deceptive business practices related to what many believe to be their latest scam, the "No Late Fees" gimmick.
In the settlement, Blockbuster will make one time refunds to customers who were fooled into having to buy movies that were returned over a week late or the re-stocking fees charged to them.
In addition to the refunds, Blockbuster will have to pay $630,000.00 to reimburse states for investigating the numerous complaints filed against them. They will also have to remove the "No Late Fees" signs from their stores."

The Misanthrope said...

The CEO should be the one to pay the fines from his salary. Instead more employees will most likely be let go.