So, I was reading Dean Baker's column in the Guardian and came to the conclusion that this guy is F&*king BRILLIANT!!

Then we have the issue of executive compensation. One of the main reasons that most workers have seen little benefit from economic growth over the last three decades has been that so much money has been redistributed upwards to the people who run companies like Fannie and Freddie.

Last year, Richard Syron, the CEO of Freddie Mac pulled down $19.8m in compensation. This is an interested number. With the new minimum wage hike, a full-year minimum wage worker would earn $13,100 a year. That means that in 1,511 years and five months, a minimum wage worker will earn as much as Syron did last year. That's good news, because before last week's increase, a minimum wage earner would have been forced to work 1,692 years and three months to equal Syron's pay.

Of course, this comparison is unfair because it doesn't consider their differences in productivity. A minimum wage worker might clean a building or run a check out counter, in other words, provide a benefit to the economy.

Syron, a man whose only job is to follow the housing market, was too incompetent to notice the largest housing bubble in the history of the world. As a result, he kept pumping in credit to hugely over-valued housing markets, allowing prices to become even more over-valued. With house prices now plummeting, tens of millions of families are seeing their life savings vanish before their eyes. Syron's productivity is considerably below that of the custodian or the checkout clerk.

Last week, government action helped to support the pay of both minimum wage workers and Bill Syron. And almost everybody in Congress thinks this is fair.

Head over to MSNBC for more of the story on Syron (or in my book Sauron...I guess I sound like a Lord of the Rings Geek, huh?)

Freddie Mac Chairman and Chief Executive Richard Syron pocketed nearly $19.8 million in compensation last year, according to a Securities and Exchange Commission filing Friday, even though the mortgage company's stock lost half its value in 2007.

If Syron stays at the helm of Freddie Mac through the end of next year, he will receive nearly $20 million in stock awards if the board says he has met certain goals. This year, he is guaranteed to get $8.8 million in stock grants regardless of performance.

For 2007, Syron received a $1.2 million salary, a $3.45 million bonus, including $1.25 million to remain at the company, and $771,585 in other compensation. He also received stock and options valued by the company at $14.3 million at the time they were awarded.

I find it fascinating that he was paid $1.2 mill TO STAY at Freddie Mac despite the de-valuation of the stock price. If I were a waitress and my average check sale fell like the devaluation of Freddie, well, I'd be looking for another job. Wouldn't most of us?

But I keep forgetting CEO's are like caviar, they smell, only the rich want it and yet, it's really just the inner scrapings of bottom feeders. I suppose this is what Dick Dauch meant by the "Entitlement Mentality" comment. Cause it sure looks like boards keep rewarding those with his kind of mentality, you know, like their ENTITLED to it.

BTW, you aren't Dickey boy nor are you Sauron, oops, I mean Syron.

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Continental cuts workforce and more due to fuel costs

DALLAS -- Continental Airlines said Thursday it is cutting 3,000 jobs and reducing capacity by 11 percent, citing record fuel costs that have pushed the industry into its worst crisis since 2001. It also said its two top executives will forgo pay for the rest of the year.

The job cuts represent about 6.5 percent of the company's work force of 45,000.

However, Continental seems to have a conscience:

The company also said Chairman and Chief Executive Lawrence Kellner and President Jeff Smisek will not take salaries or incentive pay for the rest of the year.

Did you catch that, from September until the end of the year, Kellner and Smisek will forego pay. And how much is that exactly? The Post claims:

Last year, Kellner got a salary of $712,500 and total compensation that the company valued at nearly $6 million, down 9.3 percent from the year before, according to an Associated Press analysis of a company filing with the Securities and Exchange Commission.

However, about one-third of Kellner's compensation was in stock and option grants that are now worth far less than they were when granted in February 2007 because of the slump in the company's stock. In a filing Wednesday, the company said 2008 salaries would be $296,875 for Kellner and $240,000 for Smisek.

So this salary issue made me start thinking about Dick E Dauch at American Axle and his entitlement mentality. Not long back, over at Freep (Detroit Free Press), there were all these anti-union folks pointing out that Dauch’s more than $10 mill was fair compensation for him starting the company and making it profitable. That even if they weren’t profitable (they were last year at over $37 mill profits), he still deserved a high salary of over $1mill. I wonder how many of these same people are cheering Kellner’s and Smisek’s decisions to forego pay during the current fuel crisis.

But before anyone gets their panties in to a bunch and quotes me anything about how Americans get paid too much and CEO’s earn their keep or that labor is a commodity and blather on about the market, let me point out this gem from the Post:

The company said that several fare increases have not been enough to offset the rising cost of fuel. Continental estimates it will spend $2.3 billion more this year than last _ a difference of $50,000 per employee. Fuel has surpassed labor as Continental's biggest expense.

My dad’s shop is having a similar problem. The cost of running the presses and hammers is high and he’s trying to get the company to add a fuel surcharge to orders but he hasn’t been successful at this yet. Since my dad gets a profit sharing incentive through work as his bonus, it’s important to him that the company make money and he’s sitting back and watching as his 1 to 2% bonus becomes fuel for running a hammer for a couple of days. Kind of sucks, doesn’t it?

I’m hopeful that Continental will be able to work things out without layoffs, perhaps through buyouts or retirement or attrition, because I really don’t want to see anyone have to figure out how to make it in this economy without a job and no prospect for new employment.

BTW, my dad’s shop is hiring. They’d rather hire seasoned journeymen level press operators, tool and die makers and machinists. So, if you’d like to move to Ohio, East of Cleveland, drop me a line and I’ll send your info to my dad. Ohio’s a great place to grow up, I just wish I were able to suggest something for the Continental employees.

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This isn't what the strikers at American Axle want, but it is what happens when management and owners screw workers like they are trying to do at American Axle. From WSBT in South Bend Indiana:

Explorer Van in Warsaw laid off approximately 175 workers.

Warsaw Mayor Ernest Wiggins told WSBT News Monday evening the layoffs are probably temporary due to the company running out of parts. He says Explorer Van employs more than 200 people.

Tuesday, the owner of the company confirmed the layoffs are tied to the strike at American Axle.

General Motors had to close two more plants Monday because of the strike.

Tell Dick, enoughs ENOUGH ALREADY! 60% wage cuts aren't acceptable.

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From the Boston Globe (Boston.com)

Tony Pasuy has worked as a skycap for American Airlines at Logan International Airport since 1993 and says he always loved the job. Dressed in the airline's trademark blue-and-white uniform, he helps travelers check in luggage outside the terminal, hoists heavy suitcases onto carts, and guides people in wheelchairs. Many passengers apparently liked him, too, giving him about $200 a day in tips, he said.

My mom’s a waitress and I put myself through college waiting tables on the graveyard shift. When you work for less than minimum wage, tips can make or break you. For Pasuy, it meant $200 a day in income to feed his family, put a roof over his head, maybe pay for medical bills or vacations or maybe even school clothes for kids. Basically, $200 a day meant that he could provide for himself and his family.

WELL, that is until American Airlines started to charge $2 per bag, that’s when all hell broke lose. Again from the Globe:

But American Airlines says it has done nothing wrong. It points out that signs posted at curbside kiosks say the fee excludes gratuities. The carrier says in court papers that it imposed the fee at Logan and other airports after losing $821 million in business in 2004 and contends that declining air travel after 9/11 may have caused tips to fall.

The airline is also challenging the credibility of the skycaps. Under questioning by lawyers for the airline and the skycaps, Pasuy acknowledged that he failed to report his tips to the IRS in recent years and said he earned only $8,001 in 2006, far less than his actual income.

Several airlines - including United, US Airways, and Northwest - began charging a baggage fee in recent years, but the suit in US District Court in Boston is the first to challenge it, Shannon Liss-Riordan, a Boston lawyer for the skycaps, said in an interview. Her firm is helping to prepare a similar suit against US Airways, she said.

Isn’t that sweet of American Airlines? Pointing out that tipped employees don’t declare all of their income? I think it’s so sweet. I know that when I waited tables I declared every penny because come tax time, there’s nothing like getting screwed for working without benefits, sick leave or adequate pay. Of course, American Airlines could just provide adequate pay and benefits to the skycaps to make up for the loss of the income, or, they could just fight them in court, instead. Which do you think they chose to do?

Tim Smith, a spokesman for Fort Worth-based American, said the carrier "is disappointed by the verdict and the amount awarded" and is evaluating its legal options.

So, the skycaps sued over their lost income and THE SKYCAPS WON!!

A federal jury in Boston on Monday determined that American Airlines (AMR) diverted more than $325,000 in tips from nine skycaps over the past two years since it imposed a $2 fee for curbside bag checking.

Steven Pearlstein at the Post linked this story to executive pay excess, you know, like the 10.5 million package that Dick Dauch issued to himself last year while asking his hourly employees to take a 50 to 60% pay cut this year? Well, Steve had even more scathing reviews of other executive excesses, let’s take a look:

This is not just another story of the incredible stupidity of airline executives and their willingness to sacrifice long-term customers' satisfaction and loyalty to short-term financial pressures. It is also a story of rank hypocrisy. It is these same airline executives who are constantly defending their own generous pay packages -- and those of other corporate executives -- by arguing that you can't retain and motivate key executives if they don't have the carrot of bonus pay dangled in front of their noses at all times.

That's certainly the approach being taken by Washington Mutual, the country's largest thrift, which was to the no-money-down, no-documentation mortgage loan what Drexel Burnham Lambert was to the junk bond. Now WaMu, as it is called, expects to write off $12 billion in bad loans when all is said and done. Its stock price has declined 70 percent over the past year.

Given those dismal results, it seemed only fitting that chief executive Kerry Killinger decided to forgo taking the $1.2 million bonus that he was entitled to under the company's executive compensation plan last year, settling for a measly $5.3 million in cash and stock. Other executives typically saw their bonuses cut in half.

Next year, however, things will be different. According to the company's recent proxy statement, WaMu's board of directors has decided that the bonuses for Killinger and 3,000 other top executives will be based not on net income, as is customary, but operating income, along with cost containment, fee income and customer loyalty -- all criteria that just happen to ignore the disastrous loans of the past. The board's rationale is that the point of the bonus program is to keep executives focused on improving the company's performance going forward. Or to put it another way: There's nothing we can do now about their past screw-ups, but the important thing is always to keep the carrot dangling in front of those donkeys up in corporate.

These two stories -- the one about the airline porters and the other about the WaMu executive bonus plan -- provide a window into the hypocrisy that permeates corporate thinking about incentive pay. The twisted logic goes something like this:

When times are tough, it's okay to rob the tip jar of front-line employees to make sure that there's still plenty of change in the tip jar of millionaire executives.

(EMPHASIS MINE)

Steven, you should have added Dick E Dauch to this list of out of touch executives ready and willing to rob their employees, it would have been just another very clear example of rampant hypocrisy in US executive pay.

As for Mr Pasuy and his 8 other co-plaintiffs, congrats. Hope you’re not able to make this a class action suit on behalf of all sky caps. It’s about time we had better Robin Hoods to match wits with the Robber Barons of these times.

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