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D.F. Krause
  D.F.'s Column Archive
April 19, 2006
CEO Pay Is Costing You! (Well, A Buck-Eleven)

The next time you have to buy store-brand spinach instead of name-brand spinach, blame Lee R. Raymond. He has your money.


Mr. Raymond is the recently retired CEO of Exxon, and the latest example of executive pay that outrages everyone Ė at least everyone who isnít an executive.


Mr. Raymond did OK. His $69 million salary package will probably allow him to leave the spinach coupons at home when he heads to the grocery store. And his $98 million pension payout? Well, that seems like a bit, although itís worth remembering that he spent 43 years at the company accumulating that pension value. Still, critics rage, he would have only gotten $81 million had he retired a year earlier.


The nerve of the guy sticking around an additional 12 months for Barry Bonds-type money.


Now, lest you fear for the future of Exxon, I think they can afford it. The company reported $36 billion in earnings last year, and now that all those rocks and seals in Alaska have had the oil scrubbed off them, things should continue to look bright well on into the future.


But the complaint here, of course, is that Mr. Raymondís windfall came at the expense of consumers paying upwards of $3 a gallon for gas. This is a corporate scandal for the ages, isnít it? Fat cat oil man waves goodbye to the board, the shareholders and the little people who dig the wells Ė all while his pockets bulge with hundreds and thousands Ė as the struggling seamstress with seven starving kids foots the bill by emptying every last drop into the 1979 Olds Station Wagon that also serves as their home.


Lee R. Raymond, shame on you! Those kids havenít eaten in 19 weeks, and some bimbo is feeding you turkey legs and grapes.


This is good stuff, and it might have the makings of a Michael Moore ďdocumentary,Ē except that someone Ė like me Ė might run the numbers.


Letís say, for the sake of discussion, that Lee R. Raymond was the worst CEO in the history of executiveness, and deserved compensation of absolutely zero. So take that $167 million and make it go bye-bye. Exxon never spent it. He never earned it. He worked for free.


Now, letís imagine that Exxon felt really bad for you, your next-door neighbor and that lady in the station wagon with the seven starving kids, and decided to apply the entire $167 million to savings for you at the pump.


Stop laughing. Now, the Census Bureau says there are just under 300 million people Ė hey, I said stop laughing! There are just under 300 million people in America. Letís say for the sake of discussion that half drive and buy gas. Thatís 150 million people. Now letís say $1.11 was allocated to each of those 150 million people in the form of savings on gas. With me? Good, because Mr. Raymondís entire compensation package has just been redistributed to all of Americaís drivers. Thereís nothing left. $1.11 per person. Thatís it.


Now, how many gallons of gas do you buy in a year? All right, never mind, how many do you buy in a month? Fifty, you say? Fine. Reduce the cost of a gallon of gas by two cents for one month, and youíve just used up your share of the Gas Price Reduction Resulting From Raymondís Lack Of Compensation Because He Sucked As A CEO discount.


That didnít last long, did it?


Of course, you could have used that $1.11 for other things. A dozen eggs. A Diet Coke. Some baseball cards. Remember Wacky Packs? If theyíre still around, I bet you could get some for $1.11. My favorite was Bitter Homes & Garbage magazine. But I digress.


Just about every year some enormous brouhaha develops about some CEOís compensation package. A few years ago, New York Stock Exchange CEO Dick Grasso got so much money, the attorney general of New York started trying to find some reason to call it illegal. Last I knew he was still looking.


It would be one thing if the compensation these guys receive was really being stolen from the mouths of starving children. But more often, they run the companies that make the stuff that allows those children to be fed. Of course, thatís easy for me to say, because Iím a CEO, and Iím seriously considering writing myself a check for $167 million just because I can.


But I hear your outrage, and I know that if I do that, you wonít find it funny. My bank, on the other hand, will laugh itself silly before having me arrested, which I guess just goes to show I am in the wrong business. Time to find some rocks and seals, and start scrubbing.


© 2006 North Star Writers Group. May not be republished without permission.


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