The Sprint Company and Insanity

Did you see the article yesterday in The Star?: Spring increased CEO Hesse's compensation 31% last year Is that a sweet, sweet deal or what? Here's why it's lousy for Sprint, their employees and their shareholders, however and why it MAKES ABSOLUTELY NO SENSE: "Sprint Nextel Corp boosted Chief Executive Officer Dan Hesse's compensation 31 percent last year even as the Overland Park wireless carrier reported its fifth straight annual loss." Ain't 'dat a beauty? The company you're running, the company you're responsible for, the company you're supposed to either make or keep--or both--profitable actually LOSES MONEY FOR THE 5TH STRAIGHT YEAR but your buddies, the ones you appointed to the Board of Directors VOTE YOU A PAY RAISE. And forget about, oh, I don't know, a 3% or 5% or 7 or 10% raise! They give you a whopping 31% raise in pay. And at what you were making before, this ain't chicken feed. And people wonder why there is an "Occupy" movement or why stockholders get angry. Sheesh. You'd think Mr. Hesse and all these CEOs would be embarrassed. Wait. What am I saying? Who am I kidding? Besides, it seems like EVERY Sprint CEO takes gross advantage of that organization when they're at the top of it, starting with Bill Esrey, at least, to Gary Forsee and now this. It's just more of the same. Sure, it's ugliness but they just keep on doing it-fleecing the company, the employees and the stockholders. Shameful. Link to original story: http://www.kansascity.com/2012/03/27/3518998/sprint-increased-ceo-hesses-compensation.html

Another success for the Obama Administration--and us: financial reform

Creating a consumer agency: Establishes an independent Consumer Financial Protection Bureau housed inside the Federal Reserve. Fees paid by banks fund the agency, which would set rules to curb unfair practices in consumer loans and credit cards. It would not have power over auto dealers. Credit scores: All consumers have been able to get one free credit report a year from the credit rating agencies. But the bill would also allow a consumer to get an actual credit score along with a report. Interchange fees: Lawmakers want the Fed to crack down on debit card swipe fees, which retailers pay to banks to cover the operational cost of transferring money. The Fed could cap the fees and make them more reasonable and proportional. Banning 'liar loans': Lenders would have to document a borrower's income before originating a mortgage and verify a borrower's ability to repay the loan. Mortgage help for unemployed: Unemployed homeowners with good credit would be eligible for low-interest loans to help them avoid foreclosures. The bill would spend $1 billion on such relief, using funds that had been directed for Troubled Asset Relief Fund bailing out the financial system. Fixed-equity annuities: Prohibits tougher federal rules on life insurance products, in which customers pay a lump sum upfront in exchange for monthly income over time, pegged to an index. The Securities and Exchange Commission had been gearing up to step in and start requiring more disclosure for these products, often sold to seniors, that are currently regulated by state insurance commissioners. Lawmakers decided to stop the SEC from tougher federal regulation. Too big to fail New oversight power: Creates a new 10-member oversight council consisting of financial regulators to look out for major problems at financial firms and throughout the financial system. The Treasury Secretary gains a key role in enforcing tougher regulations on larger firms and watching for systemic risk. The council also has veto power over new rules proposed by new consumer regulator. Unwinding powers: Gives the FDIC new powers to take down giant financial firms in the same way it takes down banks. Banks would be taxed to reimburse the federal government for the cost of resolving these firms after a failure occurs. Breaking up banks: Gives regulators strengthened powers to break up financial companies that have grown too big, but only if the firms threaten to destabilize the financial system. Checking on the Fed: Allows Congress to order the Government Accountability Office to review Fed activities, excluding monetary policy. Audits would be allowed two years after the Fed makes emergency loans and gives financial help to ailing financial firms. Forcing 'skin in the game': Firms that sell mortgage-backed securities must keep at least 5% of the credit risk, unless the underlying loans meet new standards that reduce risk. Financial system fee: Banks and financial firms would be taxed to pay for the $19 billion cost of implementing the Wall Street reform bill. Risky bets Regulating derivatives: Attempts to shine a light on complex financial products called derivatives that many blame for bringing down American International Group (AIG, Fortune 500) and Lehman Brothers. Would force most derivatives to be bought and sold on clearinghouses and exchanges. Some derivatives, including those traded by agriculture companies and airlines to mitigate risk, would still be unregulated. Spinning off swaps desks: Big banks that want to engage in nontraditional bets, such as on mortgage products or certain commodities, would have to spin off their swaps divisions. Reining in risky bets: Limits giant Wall Street banks from making trades on their own accounts, although with a long lead time and opportunities for delays up to seven years. While the original proposal would have banned banks from owning hedge funds, the bill would allow banks to sink up to 3% of capital into hedge funds or private equity funds. Improving credit ratings: Agencies that rate securities must disclose their methodologies. The Securities and Exchange Commission would have to study a way to find an independent way to match credit rating agencies with financial firms seeking ratings. After two years, they'd have to implement such a process, or appoint a panel to independently match ratings agencies with firms that need securities rated. Curbing executive pay: The bill would also impose new rules for how all publicly-traded companies, not just banks and other financial firms, pay top executives. Shareholders will be given a nonbinding advisory vote on how top executives are paid while in office. Shareholders also get a nonbinding advisory vote on executives' outsized severance payments, or so-called "golden parachutes." The new rules would also beef up oversight of pay practices within the financial industry, which some critics have suggested helped fuel the crisis by encouraging workers to place risky bets. The bill, for example, would require industry regulators to draft their own set of rules aimed at eliminating risky pay practice among banks and other financial firms. Link to original post: http://www.cnnmoney.com/2010/06/25/news/economy/whats_in_the_reform_bill/index.htm

What a guy

There was a fascinating, in-depth article in The New York Times yesterday, detailing CEO's pay in the last year.

The title of the article on the front page of the business section was "Executives Took, but the Directors Gave".

The Times' take on big, overdone executive pay at corporations is shown, right away, in the lead sentence for the main article and that is that "Little of the ire against outsize C.E.O. paychecks has been aimed at the people who signed off on them: corporate directors."

And while that's true, there's also the really overlooked fact that these directors are virtually always friends, buddies and pals of that same CEO so who are these little directors to not give them big, fat paychecks? "You do for me here and I'll take care of you, over there" can frequently fit the description of the relationship. That, too, has been overlooked, I think. It's a pretty chummy relationship.

A little intimidation could go a long way, too, in getting your board to load your pay, but that's another matter.

One of the most fascinating things for me, in looking over the 2 full pages of charts they printed of CEO's pay was Steve Jobs' information.

All the other CEO's listed millions of dollars to them for pay and more millions in cash bonuses, another for "perks/other" while still more listed stock awards and options awards. Virtually every column had hundreds of thousands or millions of dollars going to this or that CEO.

Who knew there were so many ways to throw money at your executive? I didn't.

Naturally, when you're looking at this list, you're drawn to who makes the biggest amounts. You're looking for, kind of, "off the chart", big pay.

So yesterday I was looking at this and I got 3 sections down on the first page and I start seeing all these zeroes. And then a "1". And then more zeroes.

And I'm thinking, what is this, all of a sudden? What does this mean?

And then I see that it's a listing of the CEO of Apple Computer.

One Steve Jobs.

And I'm knocked out.

This guy got paid one dollar last year, for his work.

Now, I don't know how much he worked--how many hours, etc., but I do know Steve Jobs is the reason why Apple exists.

I also know he's why the iPod exists and he's the reason for such cool, really beautiful and intelligent design over at Apple, since the company began.

I also know there's rumors and news reports of his being sick so who knows how much he worked last year.

But then, go a little further on the list and you see that this same Mr. Jobs has a "Total Value of Equity Holdings" in Apple of $630,409,621.00.

Yow.

That's a personal net worth of over one-half billion dollars in Apple stock only.

So, sure, he only took home $1.00 last year in pay for his work at and for his company.

But he's worth over 500 million dollars.

And yes, I keep in mind this isn't money sitting in a bank somewhere--this is what he's worth in Apple stock. Not spendable money but investments, nonetheless.

What I'm left with is, here's a guy, Steve Jobs, who doesn't fleece his company for more and more (and more dammit!) money, just so he can acquire more and more and more, for it's own sake, quite unlike his CEO counterparts.

Here's a guy, this same Steve Jobs, who thinks up and creates cool--very cool--fun products and applications and sees them all the way to production and distribution, who has helped make, really, the 21st Century a lot of the fun it is.

He helped bring us the iPhone, the iPod before it, iTunes, cool computers, a great, working software system that doesn't get viruses and bugs--in fact, in sharp contrast to Bill Gates' Microsoft Vista software, this stuff works great--and he's not bilking his own company, in the meantime.


I hope Mr. Jobs is not truly, seriously ill, for sure. I hope he's with us for a long time and with good health in the meantime.

But I will say this, one day, when he's no longer with us, we're all going to miss this man, his creativity and his personal virtues a great deal.

Here's to Steve Jobs. A great man. May he be well and live long.


Link to original article:
http://www.nytimes.com/2009/04/05/business/05board.html?th&emc=th

And a NYT article on Steve Jobs:
http://topics.nytimes.com/top/reference/timestopics/people/j/steven_p_jobs/index.html