Executives in the news

Aug. 5, 2004
When today's newspapers report on business, the articles often concern criminal activity by corporate executives.
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Khol editorials

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This makes me wonder whether or not corporate crime will eventually alter the language of the corporate environment.

Take the case of Martha Stewart, for example. Every time she entered or left the courthouse during her recent trial, she had to run a gauntlet of reporters trying to get comments from her. It is too bad she didn't make a few statements to the press on these occasions. And because we are talking about criminal activity, I would liked to have seen her use a vernacular drawn from classic gangster movies of the 1930s.

When she was indicted, I wish she would have told reporters: “I ain't talkin' until I see my mouthpiece.” That would have made a marvelous newspaper headline: STEWART NOT TALKING UNTIL SHE SEES MOUTHPIECE

Then when she was found guilty, she could have told reporters: “They ain't never built a Big House that can hold me.” Then the headline could have read: NO BIG HOUSE CAN HOLD HER, SAYS STEWART

Now let's take a look at the charges brought against former executives of Symbol Technologies, accused of using accounting tricks to inflate reported revenues and profits. The CEO of the company resigned and moved to Europe as the case was breaking. He did not appear in court to answer the charges, so prosecutors are trying to work out a deal to bring him back. The headline? CORPORATE BIG SHOT ON THE LAM

Criminal behavior is so common among corporate executives that even Rambo has gotten involved. But we aren't talking about Sylvester Stallone. We mean Judge Sylvia Rambo, who presided over the trial of executives from Rite Aid Corp. They are accused of inflating reported earnings by $1.6 billion. One of these executives was a turncoat who taped incriminating conversations with other executives, then gave the tapes to government prosecutors. By turning over evidence, the prosecutor recommended the executive get probation instead of jail time. STOOL PIGEON RATS ON PALS, AVOIDS SLAMMER

A similar thing happened at HealthSouth Corp., where a woman who was a corporate vice president agreed to testify against her former boss, who was the firm's CEO. In return, prosecutors worked out a plea bargain for her. LADY EXEC SINGS LIKE CANARY, COULD SEND BOSS UP THE RIVER

While not a case of criminal activity, there has been a great deal of newspaper coverage about a $187.5 million pay package given to the former head of the New York Stock Exchange. In one of the various lawsuits filed over the matter, he said he would forgo $48 million of the package if the stock exchange would apologize for besmirching his name. (He later rescinded the offer.)

Had the offer been accepted, I wonder whether or not a simple “we're sorry” would have constituted an apology. If so, it would have been worth $24 million per word. When you get into the business world, those numbers seem reasonable.

From newspaper reports, it is hard to pin down exactly over what time span the $187.5 million in pay is supposed to cover, but I think it is for two years. So we'll call it $93.75 million per year.

Who else could the NYSE have hired for that amount of money? For $82.8 million per year it could have hired Manny Ramirez, Alex Rodriguez, Carlos Delgado, and Derek Jeter at their present baseball salaries. If the stock exchange added another $7 million to the compensation package, it could have had Barry Bonds as well.

If you don't think baseball players would be good at running the NYSE, the stock exchange could have used the $93.75 million to hire 593 senators and congresspeople. That is more than in the combined Senate and House.

-- Ronald Khol, Editor
Send feedback to MDeditor @ penton.com

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