Footnoted: News from the Footnotes about American Corporations
Thursday, December 27th, 2007I heard on Marketplace (American Public Media’s radio show) about footnoted.org, where Michelle Leder exposes juicy information about corporations found in the footnotes of their reports. If you’re a shareholder, you might be interested to know how your management is spending your corporation’s money. Here are some fun ones:
- Fred J. Kleisner, Interim President and CEO of Morgans Hotel Group, had to relocate to New York City. The company is paying all his expenses, including a housing allowance of up to $30,000 per month. “Even in Manhattan, that guys you some nice digs.” He also gets a $750K salary with a bonus up to 200% is he meets performance targets.
- For their CEO Michael McGrath, I2 Technology paid nearly $1 million flying him between the company’s offices in Dallas and his home in Maine.
- Countrywide gave CEO David Sambol a $2.7 million promotion bonus shortly before their stock imploded.
- Qwest Communications CEO Edward Mueller’s stepdaughter attends high school in California, but Qwest is based in Denver. But no problem; she’s allowed to use the company’s Falcon 2000 private jet for her commute to school. This could cost Qwest as much as $600K, assuming normal charter rates. In fact, more than half of the CEO’s in a recent study are able to use their corporate jets for personal trips.
- David Peterschmidt is leaving as CEO of Openwave Systems after three years, for which he’ll get a lump-sum payout of $1.5 million and full vesting of his 175,000 shared of restricted stock — also worth about $1.5 million. This was while Openwave’s shares fell by 17%; it has been falling and falling ever since. Meanwhile there has been a shareholder lawsuit, involving Peterschmidt and others, claiming the the stock price dropped because of the company’s options backdating scheme, which encompassed seven years and led the company to restate its financials. In 2007, they lost $197M on revenues of $290M.
It’s good to be CEO.