Dave Astor reports that former Tribune Co. boss Dennis FitzSimons is receiving a buyout package of approximately $41 million. When contacted by E&P, AAEC President Nick Anderson for a response, Nick and others of the AAEC board drafted up a top 10 list of fund-raising ideas to make sure FitzSimmons receives his fair portion.
The list contains:
“10. Laid-off journalists sign over their unemployment checks to help a poor executive out.
“9. Tribune readers send him a quarter every day for each feature they look for in the paper but can’t find because of one of his layoffs.
“8. All remaining Tribune staffers forward any journalism prize money over to him since they couldn’t have done it without him.
“7. Auction off Tribune Tower on eBay and give him the proceeds.
“6. Lease out vacant office space at other Tribune papers to generate monthly cash flow for Mr. FitzSimons.
“5. Corrupt politicians benefiting from fewer investigative journalists create a foundation for him.
“4. Overworked journalists taking on the extra load in the wake of layoffs squeeze in just a little more time to have a bake sale in his honor.
“3. Cartoonists hold a benefit auction of original art in his honor for all that he’s done to ensure the survival of editorial cartooning in America.
“2. Get a Hollywood studio to buy the movie rights for his heroic life story of public service.
“1. Remaining staffers at Tribune papers sell a kidney to go the extra mile for Fitz
Yeah, this is the kind of greed/excess/stupidity that gives capitalism a bad name, unfortunately.
Actually, this sort of thing isn’t capitalism. Capitalism relies on the principle of supply and demand. This is nothing more than legal theft.
CEOs, (like all employees) ARE a commodity that is responsive to supply and demand forces. Companies hire CEOs (or promote them) and offer such deals because they don’t want said individual to work elsewhere. We can argue whether FitSimmons’ performance with the company merited this payola, but it was probably negotiated when he started or during peak performance evaluations by the board. To sum up… yeah, this was capitalism as excessive or as it seems.
You’re right, Alan, and the problem is that way too often a CEO’s salary and bonus structure isn’t tied to performance at all, OR it’s solely tied to the bottom line, which doesn’t take into consideration how you get there or what the future repercussions are of any shortsighted actions.
I’ve got an MBA, and two of the first things you learn in graduate business school is that 1) employees always make up the biggest portion of your expenses, and 2) you only get a tiny percentage of increased revenue (depending on your profit margin), but 100% of a decrease in expenses goes straight to the bottom line.
So in other words, if you cut employees, your profit is going to go way up, WAY moreso than if you work to increase sales and revenue.
The truth is that a large percentage of these CEOs who make these millions and millions of dollars were hired for the very purpose of axing people. This is especially true for today’s newspaper industry which has consolidated into huge corporations that have shareholders who want to match the 10 and 11 percent gains they were used to getting.
So we have a lot of newspapers who are now eating themselves alive in a desperate attempt to keep shareholders satisfied. The CEOs who are proven good eaters will continue to make millions until there is nothing left to digest.
Independent newspapers, those few that remain, are a heck of a lot healthier (and better places to work, I’m sure), than those that sold out.
You also may have learned, or observed, that companies as they grow gain many folks that aren’t very productive (deadwood). Middle managers are often pointy-haired Dilbert manager types that think more employees = more important and promotion, so they often encourage it to the detriment of the company. That being said CEOs’ salaries often seem to border on the obscene, as do professional athletes’ … so what is fair, good, just and true … who do you appoint to determine these things? There should be market forces at work for these positions and salaries. Ideally in a capitalist system the errors where worth is overrated (as this may be) should be corrected over time. Sometimes it comes too late, but even so that is, in a macro-economic sense, still a market correction.