The week started with Chuck Prince, the disgraced CEO of Citigroup (C) - Get Report, saying that he was resigning because it was the honorable thing to do. The week ends with the news that, as part and parcel of the honorable thing, Prince will be leaving with $40 million in booty.
And how did the business media react to that news? You really didn't ask that, did you?
With happy talk and apologies of course. And while it is painful to read, the Business Press Maven is happy to address it. The business media so matter-of-factly accept CEO worship that my hope is consistently targeting this malfeasance might eventually strike at those puff-files that (mis)lead investors to believe their company is in the hands of a God and, the real God willing, strike at these ridiculous pay packages and gilded offerings, which throw in the kitchen sink in rewarding incompetence as much as achievement, that waste shareholder money as needlessly as blowing 50s out the window.
But ask me sometime and I'll tell you how I really feel. Until then, let us flagellate the offenders in the Prince affair.
reports the $40 million news in the first sentence before putting it all into perspective in the second. And what
passes for perspective? Remarkably, pointing out that Prince was not handed as much as his partner in abysmal failure over at Merrill Lynch. Intoned
: "The package is less than a quarter of what former Merrill Lynch Chief Executive Stan O'Neal was awarded when he was ousted from the investment bank last week."
In case the point was still lost on you,
wends its way back to it later in the article, for emphasis and to court further favor with the CEO set, who sit on each other's executive committees. So if you are about to write me about the free market, save yourself the effort.
In this case, the fix is in and what we see is a perversion of the free market. Wrote
in Round Two of the Grand Apology: "The $40 million is in addition to about $53 million of shares Prince already owns, but Prince is receiving considerably less than the $161.5 million that Merrill Lynch's O'Neal received."
Now look. There is plenty in the package that is not technically severance, but there is enough -- including a car for five years, a driver for five years, an assistant for five years and paying the taxes on all those five-year goodies -- that the denial of a severance is too fine a point.
Well, try to tell that to
The Wall Street Journal
, which ran a headline this morning this curled my hair and made me want to pull it:
No Severance Pay for Prince."
Perhaps, Chuck, the "honorable" thing to do after driving your company into a ditch is to pay your own taxes on your own company-provided driver for the next five years. What's more, he's getting a bonus for 2007, too.
Remember, folks, this is a guy who back only in July, as the credit market began to reel, rear up and show themselves that Prince now (in)famously said: "As long as them music is playing, you've got to get up and dance."
That's leadership, huh? Dance until the music dies. But wait, the esteemed
points out that his bonus, unlike Merrill's O'Neal, will be pro-rated. And the Merrill guy got more. And it's not severance, uh, technically.
Staying on the subject of misleading CEO worship, let's talk cars ... and not the one in which Jeeves will be ferrying Prince around. Just as we began to read flowery portrayals of
CEO Rick Wagoner, it turns out that GM's comeback, as it were, met a turn in the road where there was a 1,000-car pile-up. But then along comes
, reporting hundreds of millions in losses, but doing better than expectations. Fair enough.
The Business Press Maven, in his soul, wants nothing more than for the American automobile industry to recover in full. But can't the business media learn from history (even, uh, this week's history) that it might be premature to declare a CEO brilliant in putting his car company on the comeback trail? Never mind.
Look at this horrid headline and subhead from
: Ford's Shrinking Losses Play Up Mulally's Progress
A better-than-expected third-quarter performance shows its new CEO has the carmaker on the right track.
Imagine what we are going to read when (if ever) Ford stops losing hundreds of millions and makes a thin dime. But, remember, big comebacks of companies in horrible condition often show progress then regression. The real "Way Forward," as Mulally calls his strategy, instantly lionized, often involves a false start then going backwards.
Well, we're used to seeing excited headlines about the wonderfulness and pure adorableness of CEOs in newspapers ... but we are not used to seeing excited headlines
That's why my spirits were so lifted when I saw headlines like this about
, the publisher of dozens of daily newspapers, Thursday:
Lee's quarterly profit rises, shares jump, and
Lee Rises, 4Q Profit Nearly Doubles, which came with a redundantly over-the-top subheadline: "Shares of Lee Enterprises Climb As 4th-Quarter Profit Nearly Doubles."
Anyhow, hold the applause. There was an extra week in the quarter, and without it, sales would have fallen. There were tax benefits and, outside of that, almost all the current indicators (declining subscribers, broad-based weakness in almost everything except for a slight sign of life in online advertising numbers, when online newspaper viewing only sets newspapers on a collision course with their much higher margin newspaper subscribers.)
Some of these facts appeared in the articles, which makes the headlines all the more egregious. Remember: Don't be a headline reader. In all, Lee's quarter was not as horrendous as some we've seen in the newspaper business, but it merited those supportive headlines as much as Chuck Prince.
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.
A journalist with a background on Wall Street, Marek Fuchs has written the County Lines column for The New York Times for the past five years. He also contributes regular breaking news and feature stories to many of the paper's other sections, including Metro, National and Sports. Fuchs was the editor-in-chief of Fertilemind.net, a financial Web site twice named "Best of the Web" by Forbes Magazine. He was also a stockbroker with Shearson Lehman Brothers in Manhattan and a money manager. He is currently writing a chapter for a book coming out in early 2007 on a really embarrassing subject. He lives in a loud house with three children. Fuchs appreciates your feedback;
to send him an email.