Friday, April 06, 2007
[IWS] AFL-CIO's New EXECUTIVE PAY WATCH Website Exposes Rigged CEO System [5 April 2007]
IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
AFL-CIO
EXECUTIVE PAY WATCH
http://www.aflcio.org/corporatewatch/paywatch/
AFL-CIO's New Executive PayWatch Website Exposes Rigged CEO Pay System
April 05, 2007
http://www.aflcio.org/mediacenter/prsptm/04042007.cfm
Popular Website Gives Investors the Tools to Reform System, Demand Greater Accountability
www.paywatch.org
The AFL-CIO today unveiled its 2007 Executive PayWatch Website (www.paywatch.org ), detailing how a flawed executive compensation system allowed CEOs in 2006 to collect excessive severance packages and providing an in-depth look at the ongoing stock options backdating scandal. The AFL-CIO PayWatch site -- which had more than 300,000 visitors in 2006 -- also provides a snapshot of the total compensation for CEOs, including the grant date value of stock and option grants, and offers investors a way to change a broken CEO pay system.
"CEOs have rigged the rules of the game to enable rich paydays, regardless of their performance or even if they broke the law," said AFL-CIO Secretary-Treasurer Richard Trumka. "This year's PayWatch is designed to arm working people with the information and tools they need to demand real reform."
Through six case studies, the 2007 AFL-CIO PayWatch site shows how executives benefited from large severance packages and stock options backdating at the expense of companies and their shareholders:
* The Apple Inc. (AAPL) case study explains how Steve Jobs' $1 salary was more than offset by his past equity awards, including stock options that were backdated, and how Apple has been less than forthcoming about Jobs' involvement in any improper backdating.
* The Caremark Rx, Inc. (CVS) case study explains how large golden parachutes can be an incentive to propose mergers that are not in the best interests of shareholders. According to preliminary estimates, CEO Crawford could get a severance package worth up to $287 million.
* The Home Depot Inc. (HD) case study explains how Robert Nardelli accumulated a $210 million severance package.
* The KB Home (KBH) case study explains how former CEO Bruce Karatz could receive an exit package worth as much as $175 million, despite his involvement in the backdating of stock options. Though KB Home is still in discussions with former CEO Karatz over what he will actually receive, the company has made its case more difficult if it decides not to pay him [Va1] because of his employment agreement.
* The UnitedHealth Group Inc. (UNH) case study explains how former CEO William McGuire amassed more than $2 billion in stock options during his tenure, partly through backdating some of them. McGuire's retirement status and stock options are frozen pending a special review.
* The Pfizer Inc. (PFE) case study explains how former CEO Henry McKinnell accumulated an exit package of more than $200 million despite Pfizer's poor stock performance.
In addition to the case studies, PayWatch provides a snapshot of the total compensation for CEOs, including the grant date value of stock and option awards granted in 2006.This site is the clearest, most comprehensive listing of total CEO compensation on the Internet, Trumka said.
PayWatch also shows why the stock options backdating scandal is not over, and how it will expand to include companies that spring load their stock options. Spring loading is the practice of granting options just before announcing news guaranteed to drive up the share price or granting options after the announcement of bad news to take advantage of a price drop.
Trumka also gave reporters a sneak peek at the AFL-CIO's priorities with respect to corporate governance. In building on last year's successful intervention at Pfizer and Home Depot, the AFL-CIO will focus its attention on Verizon, Trumka said, noting that the company is the poster child for "pay for pulse." Verizon CEO Ivan Seidenberg has raked in over $109 million in the past five years, despite a total shareholder return of negative 5 percent.
"Through a 'vote no' on Verizon's compensation committee and three important shareholder proposals, we will lead the effort to clean up this company's governance," Trumka said.
This year's PayWatch empowers activists and investors to make a difference in fixing the broken CEO pay process by giving working people the opportunity to voice their concerns, Trumka said. Last year more than 20,000 PayWatch visitors wrote to the SEC in support of improved pay disclosure rules. After receiving a record number of comments, the SEC adopted new rules on CEO pay disclosure.
The 2007 PayWatch provides a letter that visitors to the website can send to their representatives, urging them to support Rep. Barney Frank's bill, "The Shareholder Vote on Executive Compensation Act." The bill requires public companies to submit executive pay plans to a non-binding shareholder vote. PayWatch also provides visitors to the Website a letter they can send to SEC Chairman Christopher Cox, urging him to ensure that long-term shareholders can hold directors accountable by allowing them to place their nominees on corporate ballots.
"Working people are fed up with a system that showers CEOs with lavish rewards with little or no accountability," Trumka said. "We call upon Congress and the SEC to give long-term investors the tools they need to ensure that boards are composed of independent directors who are ready to hold management accountable to the long-term best interests of public corporations."
Contact: Steve Smith/Dana Ford (202) 637-5018
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
AFL-CIO
EXECUTIVE PAY WATCH
http://www.aflcio.org/corporatewatch/paywatch/
AFL-CIO's New Executive PayWatch Website Exposes Rigged CEO Pay System
April 05, 2007
http://www.aflcio.org/mediacenter/prsptm/04042007.cfm
Popular Website Gives Investors the Tools to Reform System, Demand Greater Accountability
www.paywatch.org
The AFL-CIO today unveiled its 2007 Executive PayWatch Website (www.paywatch.org ), detailing how a flawed executive compensation system allowed CEOs in 2006 to collect excessive severance packages and providing an in-depth look at the ongoing stock options backdating scandal. The AFL-CIO PayWatch site -- which had more than 300,000 visitors in 2006 -- also provides a snapshot of the total compensation for CEOs, including the grant date value of stock and option grants, and offers investors a way to change a broken CEO pay system.
"CEOs have rigged the rules of the game to enable rich paydays, regardless of their performance or even if they broke the law," said AFL-CIO Secretary-Treasurer Richard Trumka. "This year's PayWatch is designed to arm working people with the information and tools they need to demand real reform."
Through six case studies, the 2007 AFL-CIO PayWatch site shows how executives benefited from large severance packages and stock options backdating at the expense of companies and their shareholders:
* The Apple Inc. (AAPL) case study explains how Steve Jobs' $1 salary was more than offset by his past equity awards, including stock options that were backdated, and how Apple has been less than forthcoming about Jobs' involvement in any improper backdating.
* The Caremark Rx, Inc. (CVS) case study explains how large golden parachutes can be an incentive to propose mergers that are not in the best interests of shareholders. According to preliminary estimates, CEO Crawford could get a severance package worth up to $287 million.
* The Home Depot Inc. (HD) case study explains how Robert Nardelli accumulated a $210 million severance package.
* The KB Home (KBH) case study explains how former CEO Bruce Karatz could receive an exit package worth as much as $175 million, despite his involvement in the backdating of stock options. Though KB Home is still in discussions with former CEO Karatz over what he will actually receive, the company has made its case more difficult if it decides not to pay him [Va1] because of his employment agreement.
* The UnitedHealth Group Inc. (UNH) case study explains how former CEO William McGuire amassed more than $2 billion in stock options during his tenure, partly through backdating some of them. McGuire's retirement status and stock options are frozen pending a special review.
* The Pfizer Inc. (PFE) case study explains how former CEO Henry McKinnell accumulated an exit package of more than $200 million despite Pfizer's poor stock performance.
In addition to the case studies, PayWatch provides a snapshot of the total compensation for CEOs, including the grant date value of stock and option awards granted in 2006.This site is the clearest, most comprehensive listing of total CEO compensation on the Internet, Trumka said.
PayWatch also shows why the stock options backdating scandal is not over, and how it will expand to include companies that spring load their stock options. Spring loading is the practice of granting options just before announcing news guaranteed to drive up the share price or granting options after the announcement of bad news to take advantage of a price drop.
Trumka also gave reporters a sneak peek at the AFL-CIO's priorities with respect to corporate governance. In building on last year's successful intervention at Pfizer and Home Depot, the AFL-CIO will focus its attention on Verizon, Trumka said, noting that the company is the poster child for "pay for pulse." Verizon CEO Ivan Seidenberg has raked in over $109 million in the past five years, despite a total shareholder return of negative 5 percent.
"Through a 'vote no' on Verizon's compensation committee and three important shareholder proposals, we will lead the effort to clean up this company's governance," Trumka said.
This year's PayWatch empowers activists and investors to make a difference in fixing the broken CEO pay process by giving working people the opportunity to voice their concerns, Trumka said. Last year more than 20,000 PayWatch visitors wrote to the SEC in support of improved pay disclosure rules. After receiving a record number of comments, the SEC adopted new rules on CEO pay disclosure.
The 2007 PayWatch provides a letter that visitors to the website can send to their representatives, urging them to support Rep. Barney Frank's bill, "The Shareholder Vote on Executive Compensation Act." The bill requires public companies to submit executive pay plans to a non-binding shareholder vote. PayWatch also provides visitors to the Website a letter they can send to SEC Chairman Christopher Cox, urging him to ensure that long-term shareholders can hold directors accountable by allowing them to place their nominees on corporate ballots.
"Working people are fed up with a system that showers CEOs with lavish rewards with little or no accountability," Trumka said. "We call upon Congress and the SEC to give long-term investors the tools they need to ensure that boards are composed of independent directors who are ready to hold management accountable to the long-term best interests of public corporations."
Contact: Steve Smith/Dana Ford (202) 637-5018
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
# posted by SBasefsky : 2:00 PM
