2002 can't end fast enough for the thousands laid off as a result of the segment's worst year ever. For a precious few, however, there's a lining on that downturn cloud -- and it's made of pure gold.
Fat cats flourish, and they're adding padding aplenty despite the lean times. Oh, there's been some industry outcry over excessive executive enrichment (see Fat Cat Pay Roils Readers). But it's come to little so far. A slap on the wrist here, a federal hearing there, a sprinkling of lawsuits -- all have barely dented these folks' gilded shells. Indeed, some are doing better than they were in the boom times.
Now, we're not saying all these riches aren't earned; most fat cats came by their loot in perfectly legitimate ways. In fact, there may be plenty of good reasons for top execs' millions of dollars in bonuses, even if they are often obscure.
In any event, the industry has no one to blame but itself for the excesses that follow. So without further ado, we present Light Reading's take on the telecom world's most notorious fat cats, listed in descending order of rotundity:
No. 10: Assorted U.S. government recipients of telecom largesse Granted, a few mil a year hardly a fat cat makes. But considering the stunningly slow progress of telecom legislation stateside, we think the $86 million corporate sponsors have sent to legislators since 1989 is far too much for far, far too little (see Telecom Dollars at Work in Washington).
No. 9: John Roth Talk about working the system. The ex-CEO of Nortel Networks Corp. (NYSE/Toronto: NT) has made more since retiring in November 2001 than he did during his last months of running the company, even though his active tenure saw Nortel's market cap value halved (see Nortel's Roth Rakes It In). For the year that ended in November, Roth was on paid leave, earning about $1.5 million while dawdling at home. With plenty of time on his hands, Roth was able to divest himself of a hefty stack of Nortel shares (see Roth Selling Out? ).
No. 8: Dan DiLeo Speaking of cushy retirements: After a 32-year career culminating in the job of executive VP of the optoelectronics group of Agere Systems (NYSE: AGR/A), technologist Dan DiLeo retired at an annual salary of $440,000. He also owned over one million options on shares of Agere stock, which would have turned into Agere common shares when the company separated from Lucent in June 2002 (see Lucent Completes Agere Spinoff). DiLeo's severance entitles him to "an additional $16,042 per month until April 1, 2004, and up to $10,000 to furnish and equip a home office," according to Agere's proxy statement. Apparently not ready to drive shuffleboard pucks, DiLeo has joined the board of MegaSense Inc., just to keep his hand in (see Agere Fat Cat Boards MegaSense).
No. 7: Joe Nacchio As the high-flying CEO of Qwest Communications International Inc. (NYSE: Q), Joseph Nacchio earned close to $1 billion in 2000 alone. In 2001, he got $24,374,091 as part of a long-term incentive plan -- on top of his regular pay and bonuses (see Qwest: Ciao Nacchio?). As the year 2002 rolled in, his pay was set to rise from to $1.5 million from $1.2 million on January 1, 2002. As of March 1, his bonus was set to increase to 250 percent from 200 percent of his base salary. After a long period of criticism (see Qwest: Ciao Nacchio?), Nacchio resigned in June 2002 (see Notebaert Takes Out Nacchio). If his old employment agreement held up, he would have gotten double his annual salary on the way out.
No. 6: Tellium execs Back in the spring and summer of 2000, Tellium Inc. (Nasdaq: TELM) gave loans to a bunch of its executives to exercise their stock options. By July 25, 2002, the balance of loaned money, with interest, was $32.9 million (see Tellium Execs in Trouble?). Some in the firm proposed to forgive the money due, but the board vetoed the suggestion, leaving a slew of fat cats on short rations. Stay tuned: This one's not over yet.
No. 5: Jack Grubman Jack was the man at Salomon Smith Barney, earning a reported $20 million annually for his bullish reporting on carrier stocks. After angry shareholders took him to the cleaners, accusing him of purposely misleading them to further his company's interests (see stories too numerous to list), Grubman withdrew under a cloud but clutching a severance package said to be worth $32 million (see Jack Grubman Goes). Newspapers reported last week that he's agreed to a $15 million fine and will stay away from financial analysis forever. So now he's got only $17 million plus to play with. Oh, what a shame.
No. 4: Michael D. Capellas The latest CEO of WorldCom WorldCom Inc. (OTC: WCOEQ) doesn't have any telecom experience (see Michael D. Capellas and Capellas Leads the IT Invasion of Telecom). But he's in line to get $5 million for his first year on the job, including a $1.5 million base salary and a $2 million signing bonus, plus potential performance bonuses worth $1.5 million, according to bankruptcy filings. Capellas will also get another $18 million in restricted stock in the newly reorganized WorldCom when it emerges from bankruptcy (sometime in 2003, the company expects). Hope it's enough, Mike!
No. 3: Gary Winnick When the going got tough, the founder of Global Crossing Holdings Ltd. withdrew to his $40 million Beverly Hills mansion, hired a media rep to answer questions about how he could have made off with close to $1 billion, and left employees and common shareholders with nothing (see GlobalX: The Burst Bubble). Ongoing investigations apparently have called forth the best in Winnick, though, and this fall he emerged to offer $25 million of his personal funds to help employees whose 401(k)s were crushed in the carrier's collapse (see Winnick: I'll Cough Up $25M). That will have to do, at least for now.
No. 2: Bernie Ebbers When the flamboyant founder of WorldCom Inc. (OTC: WCOEQ) resigned amid one of the year's highest-profile financial scandals (see WorldCom Goes Boom, WorldCom Files for Bankruptcy, and Ex-WorldCom Execs Charged With Fraud), he'd managed to score over $400 million in company loans, along with a princely annual salary and millions in bonuses. The jury's apparently still out on whether he'll get to keep it all. So far, though, that Mississippi possum's plenty plump!
No. 1: Lucent execs Claiming the top spot for the second year in a row (see 2001 Top Ten: Fat Cats), Lucent Technologies Inc. (NYSE: LU) again demonstrated its ability to richly reward a chosen few while maintaining one of the industry's highest pink-slip percentages (see 2002 Top Ten: Pink Slips). According to SEC filings, CEO Patricia Russo got a guaranteed $1.8 million bonus, in addition to a base salary of $1.2 million. She's also gathered millions in stock options and restricted stock shares (see Lucent Fat Cats Gorge in 2002 and Post-Bubble Arrogance).
Besides Russo, Lucent paid at least four other execs to stay on through Russo's transition (she started work in January 2002). As disclosed in Lucent's proxy statement in 2001, Robert C. Holder, COO, received a retention payment of $4.5 million; William T. O’Shea, executive vice president of corporate strategy and business development, got $3.08 million; Frank D'Amelio, executive vice president and CFO, received $3 million; and Richard Rawson, senior vice president and general counsel, got $2.31 million to stick with the company through April 2002. They also received full vesting of their current outstanding stock options and restricted stock units.
Now, what's that ya said about a bubble?
— Mary Jander, Senior Editor, and staff of Light Reading
Well, Willy, if we gained nothing else from this thread, at least we both learned how to make our text BOLD . World peace and solving the fuel dilemma cannot be far behind.
Dude, thanks for the reply. Good responses (which I agree with). Be advised that I used the term "zipcode" for convenience, not to be taken literally! Other than that, it looks like this tired old thread is a wrap.
This scares me. Indiscriminant killing? Or were these all bad guys? How many women and children (see Mi Lai). If we become the same animals that we loathe, how can we say we’re better? Not everyone in a given zipcode is the enemy!
Got news for you: They don't have zipcodes over there. People who will forget more than I will ever know about Central Asia say that searching for "the guilty" is a fool's errand.
In the same theatre of conflict, we have a whole village wiped out, while a house where the enemy is known to be hiding is spared.
It's absolutely nuts that Bush's people let an Air Force captain order Gen. Tommy Franks not to blow up that house. It's even crazier that the incident got so little attention in the U.S. media. "Free press?" Hah!
In the interim, I already am planning to do my part, and have already chosen a hybrid gas-electric for my next car. In fact, if and when the day arrives that we no longer view gas guzzlers as status symbols, the better off we’ll all be.
By not implementing an oil conservation program after 9/11, Bush made a very serious error. The guy everyone loves to hate, Jimmy Carter, did this country a lot of good when his administration got serious about conservation in the 1970s.
The U.S. government should prohibit the sale of any vehicle that doesn't get at least 40 m.p.g. after a date certain -- maybe 5 years from now. And it should be forcing a new round of other conservation measures, too.
It took awhile, but I finally have the opportunity to respond. I agree with the majority of your replies, except below --- where you may have misunderstood me. Unfortunately here’s more fuel for the fire. I know I'll catch some poster flak, but what the hell.
You replied: One of my misgivings about Bush's kid is that he's been talking like the coach of the Dallas Cowboys or something. I'd be a lot more comfortable if the man would shut the hell up and get the job done.
My reply: I think that I know what you were trying to say. Teddy Roosevelt was of course famous for that quote, not Bush. I don’t know if Bush had attempted to reuse it. I’m not one for trite sayings (especially when they are in lieu of action), but this one rings true. The concept is that the threat of a timely and vicious reprisal is often all that is needed to discourage our enemies from supporting threats against us. Say what you will about the man, but Reagan instilled this type of healthy fear. That’s the point I was attemping to articulate. __________________________________________________
I wrote: And yes, by all means, try to avoid civilian casualties at all costs.
You replid: At all costs? I'm sure glad Harry Truman didn't see it that way. One thing I give Clinton credit for is shedding the Democratic Party's post-Vietnam pacifism. I have no desire for the U.S. to go incinerate people, but I think the biggest mistake Jimmy Carter made was when, during the Iranian hostage crisis, he kept blathering on about how the lives of the hostages were paramount.
My reply: A no-win argument – I’m sure I’ll get some flack for this one, from somebody. I’ll stand by my original statement.But to elaborate, I’m all for killing two enemies for everyone of ours killed. Consequences need to be painful. But no reckless slaughter of civilians (a Mi Lai type of massacre, for example), unless there is no viable alternative; where it truly does compromise a necessary mission (cowardly enemies using them as shields, that sort of thing) and places our troops at greater risk in attempting too much precision.
As for Truman, I don’t argue with his decision to use the A-bomb. It was necessary to convince the numb-nuts among the enemy that further resistance was futile, and saved thousands and thousands of GI lives that an invasion would have consumed. But I do question his targeting of cities with high civilian populations, not once, but twice. That’s a lot of pawns. The Japanese commited a lot of atrocities, but none even close to Hiroshima and Nagasaki in scale. It was way more than an eye for an eye(or payback for Pearl Harbor).
I’m far from being a pacifist. In fact I believe that force is the only thing some of these present-day animals understand, respect and fear. I’d like to see 2-bad guys die for every innocent killed on 9/11, but thousands and thousands of Middle Eastern innocents would only (as another poster said) create more enemies hell-bent on vengeance. __________________________________________________
You wrote: And they say we've got a "liberal press." Could you possibly imagine the s*** that would have been made out of this utterly stupid play if Gore had been the president at the time? The only place this story showed up was in the New Yorker, and about a month later in a short piece tucked way inside the Washington Post.
My reply: Right on, brother! Everything must go through the Dems vs. Reps. Political Media Filter. If OUR decision: there was a valid reason. If THEIR decision: what were they smoking? __________________________________________________
You wrote: Several months later, I read about a U.S. expedition into an Afghan village in which the American troops killed everyone there. At that point I thought to myself, maybe we have a chance.
My reply: This scares me. Indiscriminant killing? Or were these all bad guys? How many women and children (see Mi Lai). If we become the same animals that we loathe, how can we say we’re better? Not everyone in a given zipcode is the enemy! In the same theatre of conflict, we have a whole village wiped out, while a house where the enemy is known to be hiding is spared. As inconsistent as how the death penalty is applied in this country (in one state, you’re zapped if you drive the getaway car – in another, you get a life sentence for whacking a few people). __________________________________________________
Finally, I agree with RJM (and other posters who expressed the same sentiment). Take OIL out of the equation, and the Middle East may as well be an extension of Africa, as far as our attention span goes. Here’s one guy hoping that hydrogen fuel (or a similar non-polluting, unlimited resource, U.S. job creating technology) becomes viable real soon.
In the interim, I already am planning to do my part, and have already chosen a hybrid gas-electric for my next car. In fact, if and when the day arrives that we no longer view gas guzzlers as status symbols, the better off we’ll all be. Ditto for the emphasis on status and conspicuous consumption.
The best revenge on our Middle Eastern enemies? Make them insignificant, and turn the wealthy families and despots into poor ones - on a par with the have-nots.
It's also worth noting that many oil execs testified at a congressional hearing about a year ago, where they discussed drilling off Alaska and about gasoline price fixing. (US gasoline pricing follows some interesting trends as if the pricing were set by a cartel.)
A point, relevant to this topic, (which will further anger BobbyMax) is that the execs would not commit to selling that Alaska oil in domestic markets. Their primary goal seem to be to sell it to Asian markets, or at least to make the most money however they could.
So this war is not only driven by the current excesses of western fuel consumptions (particularly in the US), it's also about existing power structures establishing their positions to take from future productions, where ever they may occur.
Another way to think of it is when International Harvester and their New York financing used the industrial combines as the vehicle to take from US farm production. The US farmers were put in debt for many generations. Unfortunately, the latest Farm Bill, passed for political reasons, just pushed those debt repayments off to the next generations.
To willy: Who pays? Not me, heh? Always somebody else pays? Let the Armed forces pay with their lives so Asian productivity can move into the hands of few? Did Wealth of Nations ever predict that? Urghh.
Dude! Good advice! In fact, everyone here should go online to the Economist and read their most recent two Technology Quarterly publications. There are some articles there regarding CLECs and how they used the wrong transmission technology and didn't sell circuit voice like they should have.
Dudes: You all need to subscribe to "The Economist". Unocal and Centgas consortium were schmoozing the Taliban back in '99 to get a pipeline through Afghanistan -- as an alternative to the Caspian pipeline (that was encountering significant political opposition in some quarters). As I recall, the Taliban upped their price and negotiations fell through (in 2001?).
Now, did Dubya go into Afghanistan just because the negotiations fell through? Well, even though I think that Dubya is his own personal axis-of-evil, I think he went into Afghanistan whip Osama's butt (too bad that he seems to have missed him). But now -- "Oh well, while we're here, howza about that pipeline, Mr. Karzai?"
Cynically yours (but not completely so) --Beo
gardner wrote: "I used to work with an Afghan who once worked at a large oil company in Dallas. He claims he saw a map a few years ago with a future path for a pipeline through Afghanistan."
willywilson replied: "Something I learned in an elementary statistics class: Correlation does not equal causality."
then rjmacmahon wrote: "Right, but FOX doesn't give any data towards causality either."
I used to work with an Afghan who once worked at a large oil company in Dallas. He claims he saw a map a few years ago with a future path for a pipeline through Afghanistan.
> Something I learned in an elementary statistics > class: Correlation does not equal causality. ___________
Right, but FOX doesn't give any data towards causality either.
The maps of interest show oil leases and new projections on the size of those oil reserves.
We don't care about those tribal lines, nor were those "national" lines ever drawn up by the locals or local warfare. Those in power drew those lines. That is why the nomadics tribes continue to strive for their own nations.
Unfortunately, it looks to me that there is too much money behind those oil leases. The only way to combat that force is take away its source of power. The problem is, who ever got paid to not drive or to use *less* oil? It's cheaper than water (not to mention bandwidth) these days.
We're going to war for oil folks. Make no mistake about it. Everything else is a distraction or an ancillary topic.
Only when knowledge takes priority over energy will the world change. That means we have to pay more for discovery and less for consumption. Sadly, for us living today, this value system seems beyond the comprehension of us ants.
The title of these thread is incorrect. "Fat Cats" should be replaced with "Hungry Ants who don't know when to stop eating."
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