The Ugly Side of CapitalismTo be sure, some are merely commonplace sour-grapes attacks on tough bosses, but many more were heart-rending. They paint a picture of an ugly side of capitalism, American style; of greed and incompetence on a grand scale; and of blatant self-interest at the public trough. The greatest number of letters came from angry employees or investors in the 16 companies listed in the chart below and the bankrupt United, Mirant and Touch America Holdings.
|The Good and the Bad |
Which will perform better?
|Company||5-Year High||5-Year Low||June 14 Price||YTD % Change|
|Bad CEOs (Past or Present)|
|Xcel Energy (XEL:NYSE)||31.85||5.12||16.61||-1.4|
|General Motors (GM:NYSE)||94.62||29.75||47.45||-10.0|
|Ford Motor (F:NYSE)||38.79||6.57||15.25||-2.6|
|Bristol-Myers Squibb (BMY:NYSE)||79.25||19.49||25.79||-9.6|
|Delta Air Lines (DAL:NYSE)||72.00||4.50||5.97||-50.8|
|Electronic Data Systems (EDS:NYSE)||76.69||10.09||17.54||-27.6|
|SBC Communications (SBS:NYSE)||59.94||18.85||24.60||-4.8|
|Qwest Communications (Q:NYSE)||65.06||1.07||3.57||-15.3|
|Whole Foods Market (WFMI:Nasdaq)||87.09||14.13||86.31||28.1|
|Expeditors International (EXPD:Nasdaq)||47.68||10.16||45.98||23.8|
|Source: MSN Money|
Fetch the Tar and FeathersMost letters centered on CEO overspending, either on ill-conceived business ventures or on themselves. Dozens nominated former American Airlines chief Don Carty, who after resigning in disgrace two years ago has recently resurfaced as a potential leader of Hawaiian Airlines, the operating unit of Hawaiian Holdings ( HA). Said Doug Walsh: "He spent money like he had a printing press and mortgaged the future of AMR ( AMR). He bought arena signage in Miami and Dallas for hundreds of millions of dollars, built terminals and spent loads of money while the low-cost guys just moved into the buildings he vacated. ... Then he tried to load his pockets in the middle of the night while the employees took pay cuts. Shame on such executives who inherit vibrant healthy companies and drive them to bankruptcy. Tar and feathers are way too good for their ilk." Many telecom execs came in for a special level of anger, but the most frequently cited were Joe Nacchio at Qwest Communications ( Q) and Ed Whitacre at SBC Communications ( SBC). T. Oltmans of Denver said the botched merger of US West and Qwest, which was then run by Nacchio,
ruined tens of thousands of people's careers, lives, families and retirements in 14 states. ... We all understand the dot-com bubble, but what Joe Nacchio did to the company and stock price under his direction (down 95%) is amazing. I know several people that this has affected. ... Nacchio was rewarded for his performance with a $150 million parting gift. Evidently, this business practice is legal. ... What the FCC and SEC allowed is truly an American story that should never happen again.
Auto Industry AbusesMany readers nominated the former chief of Ford ( F). Wrote M. Kelly:
The worst CEO is Jac Nasser, hands down. He decimated employee morale by taking the worst of Jack Welch and misapplying it. He alienated employees, then shareholders and finally, the Ford dealers. The Ford family had no recourse but to remove him. He's financially secure, yet Ford Motor Co. will struggle for years from his "innovative and creative" ideas. End of story.The head man at General Motors ( GM) came in for equal abuse. Wrote reader D. Elliot:
CEO compensation is the single most important factor in competitiveness of U.S. corporations. It destroys the worker morale as average employees are told their pay, their health care and their pension are too expensive for the company to deal with; yet the executive compensation continues to skyrocket. Last week, G. Richard Wagoner, the CEO at General Motors, complained that "Soaring health care costs are crippling the competitiveness of U.S. companies." ... Meanwhile, he received a 2003 compensation package valued at $12.8 million.
How can you list really bad CEOs and leave out Michael Eisner of Disney ( DIS)? There are so many reasons, but here's one: He's put Mickey, Donald and Goofy on the ash heap of history. There was a time when every kid in America knew Mickey Mouse. Now Mike doesn't even feature him on the Disney Channel, let alone push him to the general public. Decades of product marketing are being flushed down the old toilet and good luck ever getting that "magic" back.