Billionaires' woes

As UBS continues to tumble from its high last year in the mid-60s, the top executives have revealed that they received only their base pay with no performance based bonuses. (Isn't this how it is supposed to work?) They have been on a PR campaign to show that they are conscious of the hard times and doing their part to tighten spending. This has not stopped them from scoring the largest quarterly loss of any bank out there at $11.3 billion. They expect to top that this quarter at somewhere around $15 billion.

Still, Marcel Ospel cut his pay by 90%! That should mean something? Maybe he's not a cannibal?

Not likely. He still took home over $2.6 million to add to his personal wealth of $2 billion.

That's like you and me (average home owners) earning less than $500 for a whole year of work, right? Isn't that how the math works?

Unrelated? Al Franken's Supply Side Jesus

Another nose dive

You could simply blame it on the oil executives who are hell bent on making their billions grow, but the rash of airline bankruptcies points to something simpler - ego.

Take Jonathan G Ornstein of Mesa Airlines. Mesa today announced that a budget shortfall might send the company into bankruptcy. Well, he did give away practically free airline tickets in Hawaii to drive the 60 year old Aloha Airlines out of business. He operated in the red and 'couldn't possibly be aware of the looming rise in oil prices'. Many of his employees posted on blogs that he was the worst person to work for and this whole run up against Aloha Airlines was a bad idea. So, the average airline support person has more sense than the CEO (Where do they find these CEOs? In caves?) But wait maybe he did see this coming.

In 2007, he exercised $2.8 million of his stock options out of a total of $3.3 million. Any more that the 2.8 and the SEC might be doing some investigating, eh?

But Jonny Boy wasn't the only one to take the money and run while making poor decisions for Mesa. Michael J. Lotz, President and Chief Operating Officer cashed in on $2.2 million out of his $2.8 total. Brian S. Gillman, Executive Vice President, converted $680k out of $760k total (i.e. 90%). So I guess everyone knew there were some bad decisions being made and the time to get their money out was last year (while driving Aloha out of business and putting almost 1000 lifelong Aloha employees out of a job).

Now, Mesa sees the writing on the wall, but the CEOs and prezzies made off with their millions. Mesa employees will now have to complete with ex-Aloha employees for the diminishing job opps.

Now tell me why these CEOs and executives deserve compensation 100 times as much as their average employee?

Ford Scraps profit, but not CEOs high pay

This should be the title of the current news items. CEO Alan Mulally hasn't ever shown a profit for Ford and its shareholders. He has "trimmed the workforce" (read: ruined the lives of thousands of autoworkers), but he has failed to show a gain for the company. Their market share has fallen and they have lost a lot of capacity by selling off different divisions. Mulally announced today that they aren't even going to try to show profitability until AFTER 2009!

Now lets look at some numbers. Mulally's compensation in 2006 and 2007 together total $50 million. In the same period CFO Don LeClair received about $20 million, Americas division president Mark Fields $15 million, Lewis Booth, the top European-based executive $17 million, Michael Bannister, head of Ford Motor Credit Co., $12 million.

Let's use our example of luxury as defined by living at the Four Seasons Hotel and eating meals by the pool and receiving a massage every day. Price? $400,000 if you get a suite. So we trim these CFUs compensation to $500,000 each because these are tight times, right? Aren't they?

That leaves $112 million. That's over two thousand autoworkers' jobs. These are living wage jobs. People who would keep stimulating our economy. Five men make more income than two thousand of their hard working employees.

It is no wonder Japan is kicking our collective asses and they are giving big bonuses to their auto workers!

Maybe it is because the Toyota executives are still human. They haven't turned into cannibals like their American counter parts. The proof? All 32 top execs at Toyota (one of the most profitable automakers on the planet) make under $20 million combined. That includes company President Katsuaki Watanabe's compensation. That's an average of $625,000 each. They can still stay at the Four Seasons Hotel, their company is hugely successful, and they don't turn into cannibals.

No one know what its like?

Marketing Geniuses

I put on AdSense. They said they'd put ads that were appropriate with the content posted. I had no idea they'd be so literal.






The Internet. Truly something for everyone.

Who knew?

It's going to get worse

To Gerard and all the other CEOs of airlines: Its going to get worse - a lot worse.

Oil is going to keep going up until people consume less oil. I doubt that is going to happen before oil reaches $150 a barrel. Which might happen this summer. I'd put money down that it'll happen by the time winter heating oil becomes an issue. Doubting me? I know you read Bloomberg, but read beyond the title page and ads for new yachts. Margot Habiby has great analysis.

So, start your restructuring plans that are based on preserving as many jobs as possible. This includes paring down those obscene salaries of higher management. Hint: look closely at anybody making over a half a million. I bet they can make due with less. If half the world can live on less than $2 a day, I think these CEOs can figure out how to survive on half a million dollars.

What's more American than cutting jobs to retain your high salary?

American Airlines. AMR did a nose dive today and CEO Gerard Arpey announced there might be thousands of employees laid off. The reason? He didn't have the foresight to see that oil would rise so much in price. So, why do these companies pay these CEOs so much money if they can't see what the rest of us have foretold in so many places for free?

I'll say it again. No compensation package necessary "Oil is a finite resource and its end is in sight."

So, Gerry received a 20% raise last year to $6.6 million and his deep solution at present crisis? Cut thousands from his payroll.

That's thousands of people Gerry.

People.

What drives the economy down faster than any other element? More unemployed and people failing to make a living wage. If you don't know what a living wage is google it. Last I checked it was around $17/hr. The airline industry is dominated by living wage jobs. The further the economy goes down, the less people will travel. The less they travel....do I have to spell it out?

If Gerry cuts his salary to a more humane half a million (he can still stay at the Four Seasons Hotel for that and drive his Beemer), he can keep over 100 flight attendants. But I bet he'll keep his salary and trash those 100 lives.

Why do CEOs cut jobs instead of their absurdly high compensation packages?

You tell me.

I've seen the writing on the wall

If a person has a good job, they tend to work hard. I've seen a man with determination and drive do the work of ten men. I've even seen a smart and agile woman do the work of fifty men, but I've never seen anybody do the work of a hundred people.

Unfortunately, something in our society's consciousness has gone awry and there are thousands of CEOs, CFOs, and CFUs walking around thinking they are entitled to compensation equal to a hundreds, even thousands, of people.

Everybody knows about the Waltons who pay the average worker at WalMart about $8/hr ($12,500/yr). You probably know that Waltons are multibillionaires with a combined family wealth of over $65 billion, but did you know that WalMart CEO Lee Scott received $31.6 million in compensation in 2007 alone. To use the axiom above, he received more than 2750 of his lowest paid employees combined.

Eat or be eaten?

Now, if you paid Lee Scott only a million dollars a year, limited the Waltons' incomes to a million dollars a year, and spread that money among all the 600,000 employees of WalMart nationwide you'd have a serious economic incentive package. Not the piddly little check Bush sent out. These more than a half a million peoples' wages would more than double from the sacrifice of just a few individuals!

How rich do people need to be?

Another one bites the...

California, the land of gold: Golden Sunsets, Gold Rushes, the Golden Gate Bridge -
where many of the richest people in America live -
people like Michael Perry, CEO of IndyMac.

The poor shareholders of IndyMac watched today as their stock plummeted when the company announced its $184 million in losses for this quarter alone and it doesn't expect to show a profit this year at all.

Last year's net loss was $615 million.

Mike P. decided to cancel his stock options and offer them to his employees.

Lovely. The multigazillionaire is offering his workforce shares in a company that might not be worth anything next year. BTW Mike's pilfering in the form of salary and exercised stock options over the last 5 years? $42.23 million.

Let's put this in perspective. The average high school teacher in my town makes about $48k a year in one of the most important professions for the growth and improvement of our country. Over five years that's $240k (note - all of that is spent just to scrape by). There are about 40 teachers at my local high school.

Mr. "I can't help that I f*cked up and screwed up my company" Perry makes four times as much as all the teachers at the high school put together.

Ya think he's worth it? He thinks so.

If you think so, I've got a piece of land for you!

Calling it like we see it.

Donna's mom is, in general, not very cogent.

In fact, she often seems to be living on a separate planet and communicating in a foreign language.

Recently, she was watching a television program and there were oil company CEOs trying to justify their huge salaries in the face of our high oil prices and declining economy.

In framing her reaction she becomes the most lucid of all people in our country:

"Of all the things in my life I have seen on television,
this is the most obscene."

Indeed.

Fannie's in flames, CEO Mudd gets the goods

In 2007, Fannie Mae's CEO Daniel Mudd was at the helm while bad decision followed bad decision. This time last year FNM hovered around 60 dollars a share. Today it barely creeped over 30 dollars. Danny Boy said they were going hunting for more capital. The masses bought his bait and bumped it almost 9%. DM (not to be confused with Dungeon Master) took home almost $12 million during this spiral into the abyss and the dude is only 48 years old! Back in 2005, Fannie Mae also reached around $60 per share. DM took that and drove it down to $50 share in 2006 while getting $14 million in compensation! Remember that Fannie Mae is a GSE (Government Sponsored Enterprise), so there is a good chance that if Daniel Mudd does an even worse job this year, the government will bail out the company. Talk about job security!

Here is a totally different Fannie Mae with my favorite bassist Jaco!

Oil Companies are getting so rich it's embarassing

Exxon Mobil posted their first quarter profits today. Their income rose 17% - the second most profitable quarter it is history. Gosh, and with their costs going up to $120 a barrel that must mean they are screwing us more than ever. Even with those gains, the shareholders are pissed. They expected even more gains, so we can expect that Exxon will be screwing us much worse in the next quarter. They need to get serious gains by the end of summer to justifying cutting prices just before the election. Yes, they do do that.

Good luck yall. Hope you are shopping for solar panels and an electric car.

See, we can still have NASCAR without the oil companies!