FatCat Update: Circuit City disconnects. The bastards!

"Satan's Circuit"

Two days ago, I wrote a pompous and yet totally accurate and perceptive essay about celestial salaries in a democratic society. see below or CLICK HERE The theme was that there is not a standard for decently determining a person's worth, but that radically overpaying people for their roles is a threat to our way of life.

Now comes Circuit City.
I see that they are trying to run their company ("2nd only to Best Buy") by throwing out thousands of their best employees and hiring new, cheaper ones. No, really!, they did! CLICK

So I looked to find what they have been paying their head honchos. You would think that men who had presided over the collapse of a great company were probably just street-waifs, riff-raff, dummies, not high paid supernumeraries.

It turns out that Circuit City pays its Fat Cats plenty.


1. W. Alan McCollough, Chief Executive Officer,Circuit City Stores Inc. (2005)

"In 2005, W. Alan McCollough raked in $5,470,049 in total compensation including stock option grants* from Circuit City Stores Inc..
From previous years' stock option grants, the Circuit City Stores Inc. executive cashed out $3,052,902 in stock option exercises.
And W. Alan McCollough has another $20,773,329 in unexercised stock options from previous years." CLICK

Then, he quit the job! Hmm

"Circuit City Stores, Inc. (NYSE: CC) today announced that W. Alan McCollough decided to retire as chief executive officer effective February 28, 2006, and to retire as chairman of the board of directors at the 2006 Annual Meeting of Shareholders. He has decided not to stand for reelection to the board at the end of his term that expires in June 2006.At a meeting of the Circuit City board of directors on Saturday, December 17, 2005, Philip J. Schoonover was elected unanimously to the board, effective immediately, and named chief executive officer effective March 1, 2006." CLICK

2. Philip Schoonover (2006)

"Chief Executive Officer Philip Schoonover was paid $8.52 million in fiscal 2006, including a salary of $975,000." CLICK

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So, my PRAYER for the day:
"Go get 'em God. Give 'em what they've earned."
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may they all get what they earned

Last Sunday, I saw Dennis Kozlowski interviewed on "60 Minutes." Now and then I saw a glimmer of what I might call humility, and now and then I felt a little bitty tang of sympathy for his circumstances. He is, after all, in jail.

For those of you who may have forgotten, Kozlowski is the fella who went to jail because he was found guilty of criminal activity as CEO of Tyco International Ltd. He also had $6,000 shower curtains and umbrella stands with a higher price than your car. CNN STORY CLICK HERE

One interesting clause that he said more than once was this: "... when I was earning more than a hundred million dollars..." (no transcript available so far, online. See video here: CLICK FOR VIDEO ) Now, the expression "earning" is an interesting one to me. Without consulting a dictionary, I'm assuming that when one says "earning" one is asserting that one is getting value for giving similar value. Well, what is a Kozlowski CEO "worth" (what is the value of a CEO?)

I am enough of an egalitarian to believe, and to state bold-faced and nakedly, that no human's effort is "worth" 100 million dollars because the figure itself is so stupefying that it has no concomitant standard of value against which a decent person could measure.

The other night, I happened to see A-Rod (i.e., Alex Rodriguez), a superlatively well-paid baseball player, actually fluff an easy catch which even I could have made. Now, Mr. A-Rod has a contract paying him a quarter of a billion dollars over a decade. CLICK FOR STORY By what standard do we determine that the man is actually "earning" that much money --- i.e., that he "worth" it? Is he worth less when he drops batted balls than when he catches them? Evidently not, because no one is taking anything away from him when he does it.

Is he worth more or less, I wonder, than Mr. Kozlowski who is now in the slammer?

There is no standard for making that comparison, is there? I don't think we can even compare what is earned by one baseball player against another, much less against a CEO of an industry?

At one time during the Great Depression, my grandfather was sometimes "paid" in produce for his duties as a pastor at a local community church. Was he worth it? Did he earn it? Is a dozen eggs in a depression worth as much as 100 million dollars in an economic boom? How many slick CEOs does it take to compose an honest pastor who wisely counseled a widow or gently buried a child?

I am not a sophisticated economist who might propound a theory of value here. I am not a communist and cannot accept a labor theory of value, alone. I am not a philosopher who can squeeze the question onto the head of a pin and dance with it.

But I am a believer in democracy and I'm absolutely convinced as a matter of democratic theology that 100-million-dollar salaries in our society are sinful, and that no one could possibly"earn" it.

Kozlowski is in prison. I believe that's a reward he "earned."

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I read today that the 3-M company has promised its CEO, Mr. George Buckley, more than 13 million dollars when he leaves. Now, I can understand a large salary and benefits to a CEO who actually does something, but when you talk about that kind of money merely for leaving, you have to wonder if maybe we've been paying too much money for Scotch Tape (3-M makes Scotch Tape). No wonder more and more, we're buying foreign made stuff.

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