Outsourcing refers to a company that contracts with another company to provide services that might otherwise be performed by in-house employees. Many large companies now outsource jobs such as call center services, e-mail services, and payroll. These jobs are handled by separate companies that specialize in each service, and are often located overseas.
There are many reasons that companies outsource various jobs, but the most prominent advantage seems to be the fact that it often saves money. Many of the companies that provide outsourcing services are able to do the work for considerably less money, as they don't have to provide benefits to their workers and have fewer overhead expenses to worry about.
Outsourcing also allows companies to focus on other business issues while having the details taken care of by outside experts. This means that a large amount of resources and attention, which might fall on the shoulders of management professionals, can be used for more important, broader issues within the company. The specialized company that handles the outsourced work is often streamlined, and often has world-class capabilities and access to new technology that a company couldn't afford to buy on their own. Plus, if a company is looking to expand, outsourcing is a cost-effective way to start building foundations in other countries.
There are some disadvantages to outsourcing as well. One of these is that outsourcing often eliminates direct communication between a company and its clients. This prevents a company from building solid relationships with their customers, and often leads to dissatisfaction on one or both sides. There is also the danger of not being able to control some aspects of the company, as outsourcing may lead to delayed communications and project implementation. Any sensitive information is more vulnerable, and a company may become very dependent upon its outsource providers, which could lead to problems should the outsource provider back out on their contract suddenly.
While outsourcing may prove highly beneficial for many companies, it also has many drawbacks. It is important that each individual company accurately assess their needs to determine if outsourcing is a viable option.
Sunday
List companies that outsource and those that haven't.
Here are a list companies that outsource and those that haven't.
Advertisements [?]
http://www.hireamerica.us / Is a new web site devoted to issues concerning jobs and Bush's* job-loss economic policies.
Some of the linked pages are still under construction, but I think this site has a lot of potential.
I don't now if this site was inspired by Lou Dobbs' list of companies involved in outsourcing, but I wouldn't be surprised if that turned out to be the case.
BTW, when BFEE 'experts' cite Germany's 10% unemployment, remember that they have been absorbing hundreds of thousands of refugees and the entire former East Germany during the last 15 years! They're actually doing an excellent job, IMHO!
Also, most countries have policies which demand that their citizens are hired FIRST. They only hire non-citizens if no citizen is either qualified or able to do the job.
Repuke arguments don't hold water.
http://www.hireamerica.us/
http://forum.noslaves.com/index.php?showtopic=81
Advertisements [?]
http://www.hireamerica.us / Is a new web site devoted to issues concerning jobs and Bush's* job-loss economic policies.
Some of the linked pages are still under construction, but I think this site has a lot of potential.
I don't now if this site was inspired by Lou Dobbs' list of companies involved in outsourcing, but I wouldn't be surprised if that turned out to be the case.
BTW, when BFEE 'experts' cite Germany's 10% unemployment, remember that they have been absorbing hundreds of thousands of refugees and the entire former East Germany during the last 15 years! They're actually doing an excellent job, IMHO!
Also, most countries have policies which demand that their citizens are hired FIRST. They only hire non-citizens if no citizen is either qualified or able to do the job.
Repuke arguments don't hold water.
http://www.hireamerica.us/
http://forum.noslaves.com/index.php?showtopic=81
Companies crow about keeping jobs in the USA
By Stephanie Armour, USA TODAY
As concern over the loss of jobs overseas intensifies, some companies are promoting their decision not to hire workers in other countries to replace U.S. employees.
"No outsourcing" could become the latest twist on the "made in the USA" slogan. Now, consumers are compiling Web sites that track which employers outsource overseas, which means they hire workers in other countries to do jobs typically held by U.S. employees. And some businesses are letting clients request that work not be farmed out to overseas workers.
• TaxBrain, an online tax-preparation program, includes a sentence in its program that assures customers its employees are in the USA: "All TaxBrain assistance is served from our office in California; we don't outsource jobs to India or any other third parties."
• At First Health (FHCC), a managed care company in Downers Grove, Ill., clients come to tour the call center before signing up and receive assurances that the company won't outsource.
• Pleasanton, Calif., consumer direct lender E-Loan (EELN) discloses to home equity customers that some application work is handled in India — and then lets clients choose whether to participate or have the work done domestically.
• Alpine Access, a Golden, Colo.-based call center whose employees work at home, appeals to clients by offering to match operators with the type of customers who call. Says CEO Reg Foster: "We're not just keeping jobs in America, we're creating jobs in America."
Consumers are paying attention. Web sites such as Hireamerica.us list companies that outsource and those that haven't. Those that don't are dubbed "patriotic." U.S. employers will move about 3.3 million white-collar jobs and $136 billion in wages abroad, according to Forrester Research. That's up from $4 billion in wages in 2000.
Sentiment against outsourcing is building. At the federal and state level, legislators are considering bills aimed at discouraging companies from offshoring.
The push by companies to advertise that they haven't outsourced is so new that there are no studies on how many are doing so.
Many companies that do outsource jobs aren't worried. Just 11% believed it hurt their brand image, according to a 2004 survey by Hewitt Associates.
Tom Peters, author of Re-Imagine! Business Excellence in a Disruptive Age, says people may boycott companies as the issue heats up. But companies that don't offshore "will be at a disadvantage."
As concern over the loss of jobs overseas intensifies, some companies are promoting their decision not to hire workers in other countries to replace U.S. employees.
"No outsourcing" could become the latest twist on the "made in the USA" slogan. Now, consumers are compiling Web sites that track which employers outsource overseas, which means they hire workers in other countries to do jobs typically held by U.S. employees. And some businesses are letting clients request that work not be farmed out to overseas workers.
• TaxBrain, an online tax-preparation program, includes a sentence in its program that assures customers its employees are in the USA: "All TaxBrain assistance is served from our office in California; we don't outsource jobs to India or any other third parties."
• At First Health (FHCC), a managed care company in Downers Grove, Ill., clients come to tour the call center before signing up and receive assurances that the company won't outsource.
• Pleasanton, Calif., consumer direct lender E-Loan (EELN) discloses to home equity customers that some application work is handled in India — and then lets clients choose whether to participate or have the work done domestically.
• Alpine Access, a Golden, Colo.-based call center whose employees work at home, appeals to clients by offering to match operators with the type of customers who call. Says CEO Reg Foster: "We're not just keeping jobs in America, we're creating jobs in America."
Consumers are paying attention. Web sites such as Hireamerica.us list companies that outsource and those that haven't. Those that don't are dubbed "patriotic." U.S. employers will move about 3.3 million white-collar jobs and $136 billion in wages abroad, according to Forrester Research. That's up from $4 billion in wages in 2000.
Sentiment against outsourcing is building. At the federal and state level, legislators are considering bills aimed at discouraging companies from offshoring.
The push by companies to advertise that they haven't outsourced is so new that there are no studies on how many are doing so.
Many companies that do outsource jobs aren't worried. Just 11% believed it hurt their brand image, according to a 2004 survey by Hewitt Associates.
Tom Peters, author of Re-Imagine! Business Excellence in a Disruptive Age, says people may boycott companies as the issue heats up. But companies that don't offshore "will be at a disadvantage."
CA did it to me again !
As you see a few post ago I was outsourced from CA by CANON Friday was my last day at CA/CANON .
I was told that CA need to save some money and didn't think they needed 5 people in the mail room. So they let me go.
God I though now that I worked for the OUTSOURCING company that I would save. God how wrong I was !!!
This is not wright and this is the reason why Corp America is going to hell !!
You want me to by thing from you like cars, food, t.v, ect. THEN KEEP JOB HERE IN THE USA !!!!
The thing that scares me is this is all a fad and Corp America will see ( The Hard Way ) that this will not work and they will not save the money they think they will and we will not stand for it !!
Boycott any company that OUTSOURCING !!!
I was told that CA need to save some money and didn't think they needed 5 people in the mail room. So they let me go.
God I though now that I worked for the OUTSOURCING company that I would save. God how wrong I was !!!
This is not wright and this is the reason why Corp America is going to hell !!
You want me to by thing from you like cars, food, t.v, ect. THEN KEEP JOB HERE IN THE USA !!!!
The thing that scares me is this is all a fad and Corp America will see ( The Hard Way ) that this will not work and they will not save the money they think they will and we will not stand for it !!
Boycott any company that OUTSOURCING !!!
Thursday
Did you see sunday paper ? CA doing it again !
Looks like deja vu all over again at CA Inc.
After the stock market closed for the weekend Friday afternoon, CA reported in a regulatory filing plans to eliminate 400 more jobs than planned as part of a restructuring program launched in fiscal 2007, and take an additional $75 million to $100 million in charges tied to the job cuts and consolidation of global facilities.
The original August 2006 restructuring called for 1,700 job cuts, at a cost of $200 million. But in its third-quarter report filed in February, CA quietly increased that number to 2,400. CA spokesman Dan Kaferle said the move was part of a plan to improve the company's expense structure and "increase our competitiveness."
Citing a quiet period in advance of a fourth quarter earnings release, he declined to say which regions, or job titles, would be impacted by the cuts, or specifically why they were needed now.
After the stock market closed for the weekend Friday afternoon, CA reported in a regulatory filing plans to eliminate 400 more jobs than planned as part of a restructuring program launched in fiscal 2007, and take an additional $75 million to $100 million in charges tied to the job cuts and consolidation of global facilities.
The original August 2006 restructuring called for 1,700 job cuts, at a cost of $200 million. But in its third-quarter report filed in February, CA quietly increased that number to 2,400. CA spokesman Dan Kaferle said the move was part of a plan to improve the company's expense structure and "increase our competitiveness."
Citing a quiet period in advance of a fourth quarter earnings release, he declined to say which regions, or job titles, would be impacted by the cuts, or specifically why they were needed now.
CA to sell last U.S. property, in Central Islip
this what CA had to say to newsday, gee do CA know how man employees working for them, I guess not because thers mor then 10 people in the 1150 Motor Pkwy office.
well it show how much CA is on top of thing. mybe there get it right next time and yes there will be a next time there just geting started !
CA to sell last U.S. property, in Central Islip
An unassuming advertisement for a 100,000-square-foot warehouse at 1150 Motor Pkwy. in Central Islip might have blended in with those for other sale properties in western Suffolk, but this one will mark the end of an era.
The building, which was described in a Securities and Exchange Commission filing as a "distribution center," is the last remaining piece of North American real estate in the portfolio amassed by the former Computer Associates under the leadership of founder and former chief Charles Wang. When it is sold, all of the company's non-European properties will be leased, according to its most recent annual report.
CA Inc. spokeswoman Michelle Healy said the building, which was advertised in Long Island Business News, is no longer needed because the company is "outsourcing records management and print shop." She also said that only 10 employees would be "affected" and that the sale is part of CA's effort to become more efficient.
"CA is constantly evaluating its cost structure to ensure it is competitive with its industry peers and making the most effective use of its capital," she wrote in an e-mail. Part of that effort, she wrote, is "working to better align our real estate portfolio with our business needs."
As of March 31, 2006, the company owned 965,000 square feet of office and warehouse space in North America. The year before, CA's annual report read, "We own an approximately 850,000- square-foot corporate headquarters in Islandia, N.Y., as well as various facilities throughout the United States ranging from 15,000 to 235,000 square feet."
Healy declined to confirm information from a popular commercial real estate listings Web site that the asking price for the Central Islip warehouse is $9million.
She wouldn't comment on specific questions about longer-term plans for CA, many of whose top executives live off-Island, except to say, "We remain committed to Long Island."
well it show how much CA is on top of thing. mybe there get it right next time and yes there will be a next time there just geting started !
CA to sell last U.S. property, in Central Islip
An unassuming advertisement for a 100,000-square-foot warehouse at 1150 Motor Pkwy. in Central Islip might have blended in with those for other sale properties in western Suffolk, but this one will mark the end of an era.
The building, which was described in a Securities and Exchange Commission filing as a "distribution center," is the last remaining piece of North American real estate in the portfolio amassed by the former Computer Associates under the leadership of founder and former chief Charles Wang. When it is sold, all of the company's non-European properties will be leased, according to its most recent annual report.
CA Inc. spokeswoman Michelle Healy said the building, which was advertised in Long Island Business News, is no longer needed because the company is "outsourcing records management and print shop." She also said that only 10 employees would be "affected" and that the sale is part of CA's effort to become more efficient.
"CA is constantly evaluating its cost structure to ensure it is competitive with its industry peers and making the most effective use of its capital," she wrote in an e-mail. Part of that effort, she wrote, is "working to better align our real estate portfolio with our business needs."
As of March 31, 2006, the company owned 965,000 square feet of office and warehouse space in North America. The year before, CA's annual report read, "We own an approximately 850,000- square-foot corporate headquarters in Islandia, N.Y., as well as various facilities throughout the United States ranging from 15,000 to 235,000 square feet."
Healy declined to confirm information from a popular commercial real estate listings Web site that the asking price for the Central Islip warehouse is $9million.
She wouldn't comment on specific questions about longer-term plans for CA, many of whose top executives live off-Island, except to say, "We remain committed to Long Island."
Tuesday
CA against Wang
Charles Wang, the co-founder and former chairman of Computer Associates, directed and participated in the massive $2.2-billion accounting fraud at the company, according to a blistering report issued late Friday by a committee of outside directors of the company now known as CA.
The report said the company should pursue civil actions for damages of $500 million against Wang and a small circle of former executives around him, claiming they were responsible for fraudulently inflating the company's profit margin to artificially raise the price of the company's stock.
The report also calls for Wang to repay the hundreds of millions of dollars in company stock he received through his management of the company.
The report, filed in Delaware, was prepared at the request of the CA board in answer to civil lawsuits in Delaware and in U.S. District Court in Central Islip against the company, and many of its directors and officers, seeking damages for stock fraud.
In addition to calling for the company to bring a civil suit against Wang, the report has another purpose. It amounts to a legal brief by the current officials of the company, arguing that the only people who should be held liable for damages in the civil suits are Wang and the circle of executives around him. Those executives include his longtime protege Sanjay Kumar, who recently was sentenced to 12 years in prison for involvement in the scheme.
The essence of the fraud was the so-called 35-day month in which the company would backdate some sales made in one month to the previous month to match the expectations of Wall Street analysts, the report said, linking the practice to Wang.
In a rare public statement, Wang said he was "appalled" by the report. "This fallacious report does not serve the best interest of shareholders, customers and employees," he said.
Suggesting the report was based at least in part on information from Kumar, Wang said he found it "hard to understand how the special litigation committee could believe the information they were given was credible, when their sources are those who perpetrated the crimes at issue and then lied about them to both internal company investigators and the government."
Sources familiar with the criminal investigation into the company by the federal government have said that whatever went on at the company, there was never any evidence to bring an indictment against Wang.
The committee's report said it "has uncovered credible and corroborated evidence that Mr. Wang both directed and participated in the 35-day month practice by ... instructing subordinates ... to obtain additional revenues after the closes of quarters to be counted in the prior quarter in order to meet analysts' expectations and ... negotiating and participating in deals he knew to be backdated."
"Indeed, it is the view that Mr. Wang was the direct cause of the 35-day month practice, both due to his actual conduct and the culture that he established, and that it existed for most, if not all, of his tenure as CEO," the report said.
Wang, who co-founded the company in 1976, left it in 2002.
The report portrays a company that for most of its history, according to one unnamed source, operated "as if he were running it out of his garage." In addition, Wang was assailed for establishing a "culture of fear" that brooked no dissent and in which inexperienced people were promoted to positions for which they were not qualified.
The report found the five outside directors of the company at the time of the fraud were unaware of the illegal actions and shouldn't be held liable, including former New York Stock Exchange president Richard Grasso, ex-Sen. Alfonse D'Amato, and current Stony Brook University head, Shirley Strum Kenny.
Wang for the first time acknowledged that during the probe he met with lawyers hired by CA and he said he "fully cooperated with the U.S. government at all stages."
More fundamentally, Wang said, "As the founder of CA, I am devastated by what has happened to the company and feel personally wronged by Sanjay Kumar and the management team he installed."
Meanwhile, dissident shareholder Sam Wyly celebrated. "It's a great day for us," said William Brewer, a lawyer for Wyly. "How do you say, I told you so."
tHIS IS ONE REASE WHY CA OUTSOURCEING BUT WHY SHOULD I THE ONE THAT NOTHING TO DO WITH THERE GREAD TO LOSE A JOB I WORKED SO HARD TO MAKE THIS COMPANY GET OUT OF TRUBLE ? I AM SO GLAD THIS GOING TO HAPPEN NOW " WHO WANTS TO WORK FOR A COMPANY THAT SO EVIL AND GREADY AS CA !! THIS COMPANY WILL FALL DON'T BY CA STOCK YOU WILL LOSE YOUR MONEY LIKE i DID !!
The report said the company should pursue civil actions for damages of $500 million against Wang and a small circle of former executives around him, claiming they were responsible for fraudulently inflating the company's profit margin to artificially raise the price of the company's stock.
The report also calls for Wang to repay the hundreds of millions of dollars in company stock he received through his management of the company.
The report, filed in Delaware, was prepared at the request of the CA board in answer to civil lawsuits in Delaware and in U.S. District Court in Central Islip against the company, and many of its directors and officers, seeking damages for stock fraud.
In addition to calling for the company to bring a civil suit against Wang, the report has another purpose. It amounts to a legal brief by the current officials of the company, arguing that the only people who should be held liable for damages in the civil suits are Wang and the circle of executives around him. Those executives include his longtime protege Sanjay Kumar, who recently was sentenced to 12 years in prison for involvement in the scheme.
The essence of the fraud was the so-called 35-day month in which the company would backdate some sales made in one month to the previous month to match the expectations of Wall Street analysts, the report said, linking the practice to Wang.
In a rare public statement, Wang said he was "appalled" by the report. "This fallacious report does not serve the best interest of shareholders, customers and employees," he said.
Suggesting the report was based at least in part on information from Kumar, Wang said he found it "hard to understand how the special litigation committee could believe the information they were given was credible, when their sources are those who perpetrated the crimes at issue and then lied about them to both internal company investigators and the government."
Sources familiar with the criminal investigation into the company by the federal government have said that whatever went on at the company, there was never any evidence to bring an indictment against Wang.
The committee's report said it "has uncovered credible and corroborated evidence that Mr. Wang both directed and participated in the 35-day month practice by ... instructing subordinates ... to obtain additional revenues after the closes of quarters to be counted in the prior quarter in order to meet analysts' expectations and ... negotiating and participating in deals he knew to be backdated."
"Indeed, it is the view that Mr. Wang was the direct cause of the 35-day month practice, both due to his actual conduct and the culture that he established, and that it existed for most, if not all, of his tenure as CEO," the report said.
Wang, who co-founded the company in 1976, left it in 2002.
The report portrays a company that for most of its history, according to one unnamed source, operated "as if he were running it out of his garage." In addition, Wang was assailed for establishing a "culture of fear" that brooked no dissent and in which inexperienced people were promoted to positions for which they were not qualified.
The report found the five outside directors of the company at the time of the fraud were unaware of the illegal actions and shouldn't be held liable, including former New York Stock Exchange president Richard Grasso, ex-Sen. Alfonse D'Amato, and current Stony Brook University head, Shirley Strum Kenny.
Wang for the first time acknowledged that during the probe he met with lawyers hired by CA and he said he "fully cooperated with the U.S. government at all stages."
More fundamentally, Wang said, "As the founder of CA, I am devastated by what has happened to the company and feel personally wronged by Sanjay Kumar and the management team he installed."
Meanwhile, dissident shareholder Sam Wyly celebrated. "It's a great day for us," said William Brewer, a lawyer for Wyly. "How do you say, I told you so."
tHIS IS ONE REASE WHY CA OUTSOURCEING BUT WHY SHOULD I THE ONE THAT NOTHING TO DO WITH THERE GREAD TO LOSE A JOB I WORKED SO HARD TO MAKE THIS COMPANY GET OUT OF TRUBLE ? I AM SO GLAD THIS GOING TO HAPPEN NOW " WHO WANTS TO WORK FOR A COMPANY THAT SO EVIL AND GREADY AS CA !! THIS COMPANY WILL FALL DON'T BY CA STOCK YOU WILL LOSE YOUR MONEY LIKE i DID !!
Wednesday
Tuesday
we at CA thanks Sanjay Kumar for f$%k us all !
Computer Associates Ex-CEO Pleads Guilty to Business Fraud
by The Associated Press4/25/2006 —
Sanjay Kumar, the former CEO of Computer Associates International Inc., pleaded guilty on Monday to obstruction of justice and securities fraud charges in a massive accounting scandal at the Long Island-based software company.
According to a 2004 indictment, Kumar was so involved with adding false revenue to a financial quarter even after it closed that he flew on a corporate jet to Paris in July 1999 to finalize a $19 million deal and signed a contract that had been backdated.
The indictment also charged that executives instructed salespeople to complete deals after the quarter had closed -- a practice known within the company as the "35-day month" -- and "cleaned up" contracts by removing time stamps from faxes.
"Your honor, my conduct was wrong. I take responsibility for participating in this practice, and I apologize for my actions," Kumar told the judge, referring to the accounting fraud.
The company's former head of worldwide sales, Stephen Richards, pleaded guilty to the same charges in federal court in Brooklyn. He and Kumar left the courthouse without speaking to reporters.
The guilty pleas "are a culmination of the government's successful investigation into a culture of corruption and fraud at Computer Associates," U.S. Attorney Roslynn Mauskopf said in a statement.
Five other top executives had previously pleaded guilty.
Kumar, 44, and Richards, 41, remain free on $5 million bond while awaiting their Sept. 12 sentencing. The law allows a maximum sentence of 20 years in prison for the offenses, but the term could be substantially less under federal sentencing guidelines.
Kumar also is a co-owner of the New York Islanders hockey team.
Computer Associates, which makes software and storage systems for large corporations, agreed in 2004 to pay $225 million to shareholders in a settlement letting it defer criminal prosecution. An outside monitor is tracking its financial reporting, and the company is reviewing past financial filings. Computer Associates would face no prosecution if it follows terms of the deferral agreement for 18 months.
Computer Associates restated its financial results from 2000 and 2001 to reflect $2.2 billion in revenue that was improperly booked.
During the company's fiscal year 2000, it "prematurely recognized" more than $1.4 billion in revenue from at least 116 contracts that had not yet been signed, the Securities and Exchange Commission said.
The Islandia, N.Y.-based company has said it had billions of dollars in annual revenue in the late 1990s. Reported revenues plunged after the company changed its accounting practices in the face of increased outside scrutiny.
After the FBI began investigating the company in 2002, Kumar and Richards orchestrated a cover-up that involved lying under oath about the "35-day month" and other frauds and trying to buy the silence of a potential witness, authorities said.
You can contact The about "Computer Associates Ex-CEO Pleads Guilty to Business Fraud" at editor@redmondmag.com.
Saturday
CA recently outsourced too ARINSO
As previously announced, CA recently signed a contract with ARINSO International, a leading global provider of HR business solutions. ARINSO will provide HR Services worldwide including service center operations for HR-related requests, benefits and leave administration, end-to-end recruitment services in North America, tuition assistance and employee data and file management.
Over the next few weeks, we will be providing additional details including contact information for the new HRSC and ‘what you can expect' in the subsequent phases of our implementation. In the interim, if you have any questions, please contact your local HR representative.
What HR representative ?
CA selects ARINSO for global HRO & recruitment process outsourcing
New York, Brussels, December 19, 2006ARINSO International (Euronext Brussels: ARIN), a leading provider of HR Technology Consulting & Outsourcing Services, announced today that it has been selected by CA, Inc. ('CA') one of the world's largest information technology (IT) management software companies, to provide global HRO services and outsourced recruitment. ARINSO will support these administrative processes from its HR Shared Service Centers in the Americas, Asia Pacific and Europe.
The agreement with CA spans a period of five years and covers HR administration in over 30 countries globally and Recruitment Process Outsourcing (RPO) in North America. The agreement with CA has a total contract value of over USD $60 million and confirms ARINSO's position as a global HRO service provider. It also demonstrates ARINSO's expertise in key HR processes, such as recruitment and HR administration.The global HRO solution provided by ARINSO will serve over 15,000 CA employees and will enable CA to enhance the administrative and transactional services to internal customers by rolling out innovative self-service functionality. Services will be provided by four regional HR Shared Service Centers; the Americas will be serviced by centers in Atlanta (US) and in Buenos Aires (Argentina), the center in Katowice (Poland) will service the EMEA region, and the fast growing Asia Pacific region will be serviced by a center in Manila (Philippines)."CA selected ARINSO for its strong expertise with SAP and its ability to work with us to simplify and standardize our HR business processes globally," said CA's Executive Vice President of Human Resources, Andy Goodman. "This new HR model will allow us to maximize the strategic value of CA's HR professionals and provide more value-added services to our internal customers."The North America RPO solution will enable CA to outsource the annual processing of over 20,000 candidates and the recruitment of over 1,000 applicants, based on a unique concept of 'no placement, no payment.' ARINSO has partnered with the Professional Recruitment Outsourcing unit of Philadelphia-based CDI Corporation (NYSE: CDI) to support CA's recruitment activities in the U.S. and Canada. The recruitment solution from VURV Technology will be used as the technology platform for recruitment efforts."Offering the right technology foundation and the most efficient delivery services to support vital HR processes, on a global basis, that's what we are all about at ARINSO," said Ignacio Palomera, President of ARINSO US.
INFORMATION FOR EDITORS CONTACT:ARINSO InternationalMichael CustersMarketing & Communications
Managermichael.custers@arinso.comPhone: +32 2 558 06 70
About ARINSO International ARINSO International (Euronext Brussels: ARIN) is a global HR Services partner offering comprehensive HR business solutions to the world's largest employers. ARINSO is dedicated to HR Excellence through Strategic Consultancy, Outsourcing Services and Technology Integration Services.
ARINSO was founded in 1994 and employs over 2,500 staff in 25 countries, including Argentina, Australia, Austria, Belgium, Brazil, Canada, Finland, France, Germany, Italy, Luxembourg, Malaysia, Mexico, Morocco, the Netherlands, the Philippines, Poland, Portugal, Singapore, Spain, Sweden, Switzerland, Thailand, the United Kingdom & the United States.About CA CA (NYSE: CA), one of the world's largest information technology (IT) management software companies, unifies and simplifies the management of enterprise-wide IT. Founded in 1976, CA is headquartered in Islandia, N.Y., and serves customers in more than 140 countries. For more information, please visit http://ca.com/.
Over the next few weeks, we will be providing additional details including contact information for the new HRSC and ‘what you can expect' in the subsequent phases of our implementation. In the interim, if you have any questions, please contact your local HR representative.
What HR representative ?
CA selects ARINSO for global HRO & recruitment process outsourcing
New York, Brussels, December 19, 2006ARINSO International (Euronext Brussels: ARIN), a leading provider of HR Technology Consulting & Outsourcing Services, announced today that it has been selected by CA, Inc. ('CA') one of the world's largest information technology (IT) management software companies, to provide global HRO services and outsourced recruitment. ARINSO will support these administrative processes from its HR Shared Service Centers in the Americas, Asia Pacific and Europe.
The agreement with CA spans a period of five years and covers HR administration in over 30 countries globally and Recruitment Process Outsourcing (RPO) in North America. The agreement with CA has a total contract value of over USD $60 million and confirms ARINSO's position as a global HRO service provider. It also demonstrates ARINSO's expertise in key HR processes, such as recruitment and HR administration.The global HRO solution provided by ARINSO will serve over 15,000 CA employees and will enable CA to enhance the administrative and transactional services to internal customers by rolling out innovative self-service functionality. Services will be provided by four regional HR Shared Service Centers; the Americas will be serviced by centers in Atlanta (US) and in Buenos Aires (Argentina), the center in Katowice (Poland) will service the EMEA region, and the fast growing Asia Pacific region will be serviced by a center in Manila (Philippines)."CA selected ARINSO for its strong expertise with SAP and its ability to work with us to simplify and standardize our HR business processes globally," said CA's Executive Vice President of Human Resources, Andy Goodman. "This new HR model will allow us to maximize the strategic value of CA's HR professionals and provide more value-added services to our internal customers."The North America RPO solution will enable CA to outsource the annual processing of over 20,000 candidates and the recruitment of over 1,000 applicants, based on a unique concept of 'no placement, no payment.' ARINSO has partnered with the Professional Recruitment Outsourcing unit of Philadelphia-based CDI Corporation (NYSE: CDI) to support CA's recruitment activities in the U.S. and Canada. The recruitment solution from VURV Technology will be used as the technology platform for recruitment efforts."Offering the right technology foundation and the most efficient delivery services to support vital HR processes, on a global basis, that's what we are all about at ARINSO," said Ignacio Palomera, President of ARINSO US.
INFORMATION FOR EDITORS CONTACT:ARINSO InternationalMichael CustersMarketing & Communications
Managermichael.custers@arinso.comPhone: +32 2 558 06 70
About ARINSO International ARINSO International (Euronext Brussels: ARIN) is a global HR Services partner offering comprehensive HR business solutions to the world's largest employers. ARINSO is dedicated to HR Excellence through Strategic Consultancy, Outsourcing Services and Technology Integration Services.
ARINSO was founded in 1994 and employs over 2,500 staff in 25 countries, including Argentina, Australia, Austria, Belgium, Brazil, Canada, Finland, France, Germany, Italy, Luxembourg, Malaysia, Mexico, Morocco, the Netherlands, the Philippines, Poland, Portugal, Singapore, Spain, Sweden, Switzerland, Thailand, the United Kingdom & the United States.About CA CA (NYSE: CA), one of the world's largest information technology (IT) management software companies, unifies and simplifies the management of enterprise-wide IT. Founded in 1976, CA is headquartered in Islandia, N.Y., and serves customers in more than 140 countries. For more information, please visit http://ca.com/.
America is Losing IT and Other Technical Jobs To Outsourcing At An Alarming Rate....
THIS ISN'T A SHIRT OR A TOY, this is YOUR bank accounts, credit and personal information, in a foreigners hands.
How easy would it be for terrorists to get this information ?
Would a non-American think twice about selling this information to the wrong person ? Don't do business with companies that outsource....
Dump their stock, tell them you won't do business with them because they outsource.
Write to Congress, your state Senator, the President and ask them why companies are allowed to import cheap labor on L1/H1 Visa's when there is an American needing that job. Ask Why American workers are being forced to train their cheaper replacement and then laid-off.
Ask why your personal information; credit, banking and health info is in the hands of foreigners.
Billions in lost tax revenue, many livelihoods destroyed. So what can you DO ABOUT OUTSOURCING ?
http://www.nojobsforindia.com/
How easy would it be for terrorists to get this information ?
Would a non-American think twice about selling this information to the wrong person ? Don't do business with companies that outsource....
Dump their stock, tell them you won't do business with them because they outsource.
Write to Congress, your state Senator, the President and ask them why companies are allowed to import cheap labor on L1/H1 Visa's when there is an American needing that job. Ask Why American workers are being forced to train their cheaper replacement and then laid-off.
Ask why your personal information; credit, banking and health info is in the hands of foreigners.
Billions in lost tax revenue, many livelihoods destroyed. So what can you DO ABOUT OUTSOURCING ?
http://www.nojobsforindia.com/
Bush economic report praises 'outsourcing' jobs
Bush economic report praises 'outsourcing' jobs
Tuesday, February 10, 2004By Warren Vieth and Edwin Chen, Los Angeles Times
WASHINGTON -- The movement of U.S. factory jobs and white-collar work to other countries is part of a positive transformation that will enrich the U.S. economy over time, even if it causes short-term pain and dislocation, the Bush administration said yesterday.
The embrace of foreign "outsourcing," an accelerating trend that has contributed to U.S. job losses in recent years and become an issue in the 2004 elections, is contained in the president's annual report to Congress on the health of the U.S. economy.
"Outsourcing is just a new way of doing international trade," said N. Gregory Mankiw, chairman of Bush's Council of Economic Advisors, which prepared the report. "More things are tradable than were tradable in the past. And that's a good thing."
The report, which predicts that the nation will reverse a three-year employment slide by creating 2.6 million jobs in 2004, is part of a weeklong effort by the administration to highlight signs that the recovery is picking up speed. Bush's economic stewardship has become a central issue in the presidential campaign, and the White House is eager to demonstrate that his policies are producing results.
In his message to Congress yesterday, Bush said the economy "is strong and getting stronger," thanks in part to his tax cuts and other economic programs. He said the nation had survived a stock market meltdown, recession, terrorist attacks, corporate scandals and war in Afghanistan and Iraq, and was finally beginning to enjoy "a mounting prosperity that will reach every corner of America."
The president repeated that message during an afternoon "conversation" on the economy at SRC Automotive, an engine-rebuilding plant in Springfield, Mo., where he lashed out at lawmakers who oppose making his tax cuts permanent.
"When they say, 'We're going to repeal Bush's tax cuts,' that means they're going to raise your taxes, and that's wrong. And that's bad economics," he said.
Democrats who want Bush's job were quick to challenge his claims.
Massachusetts Sen. John F. Kerry, the front-runner for the Democratic presidential nomination, supports a rollback of Bush's tax cuts for the wealthiest Americans and backs the creation of tax incentives for companies that keep jobs in the United States -- although he supported the North American Free Trade Agreement, which many union members say is responsible for the migration of U.S. jobs, particularly in the auto industry, to Mexico.
Campaigning yesterday in Roanoke, Va., Kerry questioned the credibility of the administration's job-creation forecast. "I've got a feeling this report was prepared by the same people who brought us the intelligence on Iraq," he said. "I don't think we need a new report about jobs in America. I think we need a new president who's going to create jobs in America and put Americans back to work."
In an evening appearance at George Mason University in Fairfax, Va., North Carolina Sen. John Edwards mocked the Bush administration's economic report.
Edwards, also a Democratic presidential nomination candidate who also supports repealing tax cuts for the richest Americans and offering incentives to corporations that create new jobs in the United States, said it would come as a "news bulletin" to the American people that the economy is improving and the outsourcing of jobs overseas is good for America.
"These people," he said of the Bush administration, "what planet do they live on? They are so out of touch."
The president's 411-page report contains a detailed diagnosis of the forces contributing to the U.S. economic slowdown and a wide-ranging defense of the policies Bush has pursued to combat it.
It asserts that the last recession actually began in late 2000, before the president took office, instead of March 2001, as certified by the official recession-dating panel of the National Bureau of Economic Research.
The report repeats the administration's contention that the Bush tax cuts must be made permanent to have their full beneficial effect on the economy.
Social Security also must be restructured to let workers put part of their retirement funds in private accounts, the report argues. Doing so could add nearly $5 trillion to the national debt by 2036, the president's advisers note, but the additional borrowing would be repaid 20 years later, and the program's long-term health would be more secure.
Tuesday, February 10, 2004By Warren Vieth and Edwin Chen, Los Angeles Times
WASHINGTON -- The movement of U.S. factory jobs and white-collar work to other countries is part of a positive transformation that will enrich the U.S. economy over time, even if it causes short-term pain and dislocation, the Bush administration said yesterday.
The embrace of foreign "outsourcing," an accelerating trend that has contributed to U.S. job losses in recent years and become an issue in the 2004 elections, is contained in the president's annual report to Congress on the health of the U.S. economy.
"Outsourcing is just a new way of doing international trade," said N. Gregory Mankiw, chairman of Bush's Council of Economic Advisors, which prepared the report. "More things are tradable than were tradable in the past. And that's a good thing."
The report, which predicts that the nation will reverse a three-year employment slide by creating 2.6 million jobs in 2004, is part of a weeklong effort by the administration to highlight signs that the recovery is picking up speed. Bush's economic stewardship has become a central issue in the presidential campaign, and the White House is eager to demonstrate that his policies are producing results.
In his message to Congress yesterday, Bush said the economy "is strong and getting stronger," thanks in part to his tax cuts and other economic programs. He said the nation had survived a stock market meltdown, recession, terrorist attacks, corporate scandals and war in Afghanistan and Iraq, and was finally beginning to enjoy "a mounting prosperity that will reach every corner of America."
The president repeated that message during an afternoon "conversation" on the economy at SRC Automotive, an engine-rebuilding plant in Springfield, Mo., where he lashed out at lawmakers who oppose making his tax cuts permanent.
"When they say, 'We're going to repeal Bush's tax cuts,' that means they're going to raise your taxes, and that's wrong. And that's bad economics," he said.
Democrats who want Bush's job were quick to challenge his claims.
Massachusetts Sen. John F. Kerry, the front-runner for the Democratic presidential nomination, supports a rollback of Bush's tax cuts for the wealthiest Americans and backs the creation of tax incentives for companies that keep jobs in the United States -- although he supported the North American Free Trade Agreement, which many union members say is responsible for the migration of U.S. jobs, particularly in the auto industry, to Mexico.
Campaigning yesterday in Roanoke, Va., Kerry questioned the credibility of the administration's job-creation forecast. "I've got a feeling this report was prepared by the same people who brought us the intelligence on Iraq," he said. "I don't think we need a new report about jobs in America. I think we need a new president who's going to create jobs in America and put Americans back to work."
In an evening appearance at George Mason University in Fairfax, Va., North Carolina Sen. John Edwards mocked the Bush administration's economic report.
Edwards, also a Democratic presidential nomination candidate who also supports repealing tax cuts for the richest Americans and offering incentives to corporations that create new jobs in the United States, said it would come as a "news bulletin" to the American people that the economy is improving and the outsourcing of jobs overseas is good for America.
"These people," he said of the Bush administration, "what planet do they live on? They are so out of touch."
The president's 411-page report contains a detailed diagnosis of the forces contributing to the U.S. economic slowdown and a wide-ranging defense of the policies Bush has pursued to combat it.
It asserts that the last recession actually began in late 2000, before the president took office, instead of March 2001, as certified by the official recession-dating panel of the National Bureau of Economic Research.
The report repeats the administration's contention that the Bush tax cuts must be made permanent to have their full beneficial effect on the economy.
Social Security also must be restructured to let workers put part of their retirement funds in private accounts, the report argues. Doing so could add nearly $5 trillion to the national debt by 2036, the president's advisers note, but the additional borrowing would be repaid 20 years later, and the program's long-term health would be more secure.
Corporate America: The Land of the Greed
August 31, 1998
One can get attached to wide open spaces living in the center of the United States. However becoming geographically challenged is a drawback if you stay too long. Over the last thirty years business trends have led to a disturbing fact; small town America is dying.
Case in point: Enid, OklahomaIn the late 1960's and early 1970's my parents would cram the family in the car and drive to the third largest city in Oklahoma; Enid. It was a modern city in many ways. Champlin refinery (and the oil business in general), Phillips University, Vance Air Force Base, Bond bakery and Gold Spot dairy all provided Northwest Oklahoma with a big city outpost and good jobs to keep the city a wonderful place to live and work. At one time Geronimo automobiles called Enid home (only one Geronimo car still exists and it is on display at a local museum.)
The Enid town square was visible from miles away as several skyscrapers surrounded and dwarfed the large county court house in the center of town. The Broadway Tower was the largest. Enid hosted another type of skyscraper; North of downtown stretched one of the top three largest grain storage complexes in the world.
Three railroads served the town and the grain complex with lines radiating out in ten directions (The Atchinson Topeka and Santa Fe, the St. Louis and San Francisco (better known as "The 'Frisco"), and the Chicago Rock Island and Pacific (better known as "The Rock Island").
In fact, the town still had passenger rail service up until 1968, although the Rock Island's Twin Star Rocket was probably not used frequently because it arrived in the early morning hours. An amusement park existed on the Southwest side of town.
As Enid FadesToday it is obvious that Enid is dying. The oil business has moved to Houston and overseas. In fact, the Champlin refinery has been dismantled and moved to Houston. Gold Spot dairy has closed after being merged with corporate conglomerate AMPI (American Milk Producers Incorporated).
While not a large dairy, Gold Spot did have an effect and local presence in the town. The milk tanks have been removed and a thrift store has replaced the corporate offices. Bond bread is gone. Geronimo cars were only produced for a short time because after the plant burned, no one bothered to rebuild. The downtown square looks like a ghost town. One expects a tumble weed to roll by at any minute.
Parking is no problem as it was in the 1960's and 1970's. Only three railroads still remain in town. Farmrail, the Burlington Northern Santa Fe, and the Union Pacific. The Union Pacific runs through town on a north south route. The Burlington Northern Santa Fe runs east west. Farmrail's deteriorating tracks run southwest of town. There are no local railroad offices remaining.
Many elevators sit empty while grain piles up outside other active elevators. The railroad no longer sees grain transport as a volume business in Enid so much of it is moved by semi trailers. Storage of grain is no longer seen as necessary in this town which is far removed from export grain sea ports. The oil business in Oklahoma has been dead for nearly fifteen years.
The result: Enid is collapsing. The loss of business has forced Phillips University to close its doors and liquidate its assets. The mall that was built to try and attract retail business is suffering. Even more the small businessman has changed. The Ma and Pa business have given way to national franchises. When was the last time you had a good Lotta Burger or Gold Spot hot fudge sundae?
Corporate AmericaWhat does this have to do with Corporate America? Corporate America has one goal; to please the stockholder. The customer and employee are left to suffer the consequences and, in turn, the nation suffers.
The big cities get bigger and the small cities die.
Corporate America is a silent invasion that takes families captive. These families are forced to move to the dangerous metro centers where gangs, crime and a general hectic pace of life prevail.
But that is another story.
The problem is that Corporate America has lost touch with general moral values upon which this country was built. Corporate America has become the Land of the Greed. Honesty, Quality, Company Loyalty to the employee and by the employee to the company, modest growth, customer satisfaction, and life-long careers all seem to be worthless in today's rat race. As a society we have become all too willing to purchase products that lack quality. Note the phrase "we live in a throwaway society."
What has caused this lack of quality? There are numerous reasons. Employees are forced to leave small cities like Enid and live in the traffic choked, family unfriendly, dirty "mega"tropolises. Mergers always loom on the horizon with the prospect of confusion and layoffs. Why go the extra mile when you are just running in circles?
The proposed four day week that was rumored in the 1970's has become the six day 70 hour work week for many of us and unemployment for others. Salaries have not kept pace with business growth so both household heads have to work. Employees suffer burnout as a record pace. Did someone say stress? All of this is caused by one trend.
Empires Over SatisfactionCorporate CEO's are more interested in Empire Building than Customer Satisfaction. Merging Corporations seems to be the new goal of the "head cheese." I know of some businesspersons who have left the same company several times only to return when the latest merger is announced. These major corporations are located in tier one cities for the most part and therefore good jobs are being sucked out of small cities at a record pace. This is why Enid is dying and the "mega"troplises are choking on their own consumption.
This devouring of the small town spirit is why gangs are becoming more violent as jobs in the heartland disappear and reappear in big cities. Mergers cause mass confusion on a corporate scale. People are displaced from their niche on both sides; buyer and buyee. The company expends resources on assimilation and consolidation rather than competition and quality. Mergers are sometimes a necessary evil. However, our government leaders seem blind to the effect on society as their approval is only a rubber stamp away.
ConclusionI would urge any politician reading this to think twice and read the facts before signing on the dotted line the next time you review a merger request. Stockholders beware: Not every merger is good. Consumers... drive past that national burger franchise and eat a Lotta Burger if you can find one.
One can get attached to wide open spaces living in the center of the United States. However becoming geographically challenged is a drawback if you stay too long. Over the last thirty years business trends have led to a disturbing fact; small town America is dying.
Case in point: Enid, OklahomaIn the late 1960's and early 1970's my parents would cram the family in the car and drive to the third largest city in Oklahoma; Enid. It was a modern city in many ways. Champlin refinery (and the oil business in general), Phillips University, Vance Air Force Base, Bond bakery and Gold Spot dairy all provided Northwest Oklahoma with a big city outpost and good jobs to keep the city a wonderful place to live and work. At one time Geronimo automobiles called Enid home (only one Geronimo car still exists and it is on display at a local museum.)
The Enid town square was visible from miles away as several skyscrapers surrounded and dwarfed the large county court house in the center of town. The Broadway Tower was the largest. Enid hosted another type of skyscraper; North of downtown stretched one of the top three largest grain storage complexes in the world.
Three railroads served the town and the grain complex with lines radiating out in ten directions (The Atchinson Topeka and Santa Fe, the St. Louis and San Francisco (better known as "The 'Frisco"), and the Chicago Rock Island and Pacific (better known as "The Rock Island").
In fact, the town still had passenger rail service up until 1968, although the Rock Island's Twin Star Rocket was probably not used frequently because it arrived in the early morning hours. An amusement park existed on the Southwest side of town.
As Enid FadesToday it is obvious that Enid is dying. The oil business has moved to Houston and overseas. In fact, the Champlin refinery has been dismantled and moved to Houston. Gold Spot dairy has closed after being merged with corporate conglomerate AMPI (American Milk Producers Incorporated).
While not a large dairy, Gold Spot did have an effect and local presence in the town. The milk tanks have been removed and a thrift store has replaced the corporate offices. Bond bread is gone. Geronimo cars were only produced for a short time because after the plant burned, no one bothered to rebuild. The downtown square looks like a ghost town. One expects a tumble weed to roll by at any minute.
Parking is no problem as it was in the 1960's and 1970's. Only three railroads still remain in town. Farmrail, the Burlington Northern Santa Fe, and the Union Pacific. The Union Pacific runs through town on a north south route. The Burlington Northern Santa Fe runs east west. Farmrail's deteriorating tracks run southwest of town. There are no local railroad offices remaining.
Many elevators sit empty while grain piles up outside other active elevators. The railroad no longer sees grain transport as a volume business in Enid so much of it is moved by semi trailers. Storage of grain is no longer seen as necessary in this town which is far removed from export grain sea ports. The oil business in Oklahoma has been dead for nearly fifteen years.
The result: Enid is collapsing. The loss of business has forced Phillips University to close its doors and liquidate its assets. The mall that was built to try and attract retail business is suffering. Even more the small businessman has changed. The Ma and Pa business have given way to national franchises. When was the last time you had a good Lotta Burger or Gold Spot hot fudge sundae?
Corporate AmericaWhat does this have to do with Corporate America? Corporate America has one goal; to please the stockholder. The customer and employee are left to suffer the consequences and, in turn, the nation suffers.
The big cities get bigger and the small cities die.
Corporate America is a silent invasion that takes families captive. These families are forced to move to the dangerous metro centers where gangs, crime and a general hectic pace of life prevail.
But that is another story.
The problem is that Corporate America has lost touch with general moral values upon which this country was built. Corporate America has become the Land of the Greed. Honesty, Quality, Company Loyalty to the employee and by the employee to the company, modest growth, customer satisfaction, and life-long careers all seem to be worthless in today's rat race. As a society we have become all too willing to purchase products that lack quality. Note the phrase "we live in a throwaway society."
What has caused this lack of quality? There are numerous reasons. Employees are forced to leave small cities like Enid and live in the traffic choked, family unfriendly, dirty "mega"tropolises. Mergers always loom on the horizon with the prospect of confusion and layoffs. Why go the extra mile when you are just running in circles?
The proposed four day week that was rumored in the 1970's has become the six day 70 hour work week for many of us and unemployment for others. Salaries have not kept pace with business growth so both household heads have to work. Employees suffer burnout as a record pace. Did someone say stress? All of this is caused by one trend.
Empires Over SatisfactionCorporate CEO's are more interested in Empire Building than Customer Satisfaction. Merging Corporations seems to be the new goal of the "head cheese." I know of some businesspersons who have left the same company several times only to return when the latest merger is announced. These major corporations are located in tier one cities for the most part and therefore good jobs are being sucked out of small cities at a record pace. This is why Enid is dying and the "mega"troplises are choking on their own consumption.
This devouring of the small town spirit is why gangs are becoming more violent as jobs in the heartland disappear and reappear in big cities. Mergers cause mass confusion on a corporate scale. People are displaced from their niche on both sides; buyer and buyee. The company expends resources on assimilation and consolidation rather than competition and quality. Mergers are sometimes a necessary evil. However, our government leaders seem blind to the effect on society as their approval is only a rubber stamp away.
ConclusionI would urge any politician reading this to think twice and read the facts before signing on the dotted line the next time you review a merger request. Stockholders beware: Not every merger is good. Consumers... drive past that national burger franchise and eat a Lotta Burger if you can find one.
Corporate Greed in America
The Issue: Corporate Greed in America
The Facts:
$ While the average worker in America makes $25 thousand per year, the average CEO salary is $14 million and climbing.
$ These same, overpriced CEOs have shifted millions of American jobs overseas, where child labor, worker coercion and slave wages are the rule.
$ Due to tax cuts Republicans have doled out to their Big Business friends, corporate tax receipts are now only 7.4% of overall federal revenue.
$ In 2002, the CEOs of the 50 U.S. companies that laid off the most workers got an average pay raise of 44%.
$ In 2002, CEOs for the 30 companies with the biggest shortfalls in employee pension funds were paid 59% more than CEOs at other companies.
What Republicans Claim:
$ They say that agencies like the Securities & Exchange Commission should be controlled by the same corporations they are supposed to be regulating.
$ They say that taking huge “campaign contributions” and then writing laws that benefit those same “contributors” isn’t really legalized bribery.
The Truth Of The Matter:
$ Corporate compensation for all executives must be reported as a separate item in all financial statements.
$ Even though shipping jobs to countries with low wages is good for CEO stock options and bonuses, it’s bad for America and just plain wrong.
$ Corporate campaign contributions must be reined in and regulated.
Fun Facts To Know And Tell:
$ Until Enron went bankrupt and Ken Lay’s crimes were exposed in the media, Mr. Lay was extremely influential with the current administration.
$ Bush’s pet name for Ken Lay was “Kenny Boy!”
The Facts:
$ While the average worker in America makes $25 thousand per year, the average CEO salary is $14 million and climbing.
$ These same, overpriced CEOs have shifted millions of American jobs overseas, where child labor, worker coercion and slave wages are the rule.
$ Due to tax cuts Republicans have doled out to their Big Business friends, corporate tax receipts are now only 7.4% of overall federal revenue.
$ In 2002, the CEOs of the 50 U.S. companies that laid off the most workers got an average pay raise of 44%.
$ In 2002, CEOs for the 30 companies with the biggest shortfalls in employee pension funds were paid 59% more than CEOs at other companies.
What Republicans Claim:
$ They say that agencies like the Securities & Exchange Commission should be controlled by the same corporations they are supposed to be regulating.
$ They say that taking huge “campaign contributions” and then writing laws that benefit those same “contributors” isn’t really legalized bribery.
The Truth Of The Matter:
$ Corporate compensation for all executives must be reported as a separate item in all financial statements.
$ Even though shipping jobs to countries with low wages is good for CEO stock options and bonuses, it’s bad for America and just plain wrong.
$ Corporate campaign contributions must be reined in and regulated.
Fun Facts To Know And Tell:
$ Until Enron went bankrupt and Ken Lay’s crimes were exposed in the media, Mr. Lay was extremely influential with the current administration.
$ Bush’s pet name for Ken Lay was “Kenny Boy!”
The great overpaid CEO debate
Get Real
I don't mind CEO's making more than I do. What gripes me is when their salaries are in the millions and they are getting annual bonuses while at the same time I am being told that the highest annual pay raise I can receive is 4%, which is less than the cost of living increase. What planet do you live on?
Are CEOs overpaid? Many people think so.
Many potential causes of overpayment have been identified: CEOs with too much power, inattentive boards of directors, conflicts of interest by compensation consultants, the use of stock options--the list goes on.
Some studies show the average CEO was paid $10 million to $15 million in 2005. This includes their salary, bonus, stock option gains, stock grants, and various executive benefits and perquisites.
Are rank-and-file workers underpaid? Everyone, I suppose, feels a little underpaid. Some data sources indicate the average American worker was paid about $40,000 in 2005. Anyone working in the technology sector knows this average pay level would barely hire a below-average administrative assistant in any of the technology hot spots in the U.S. And the average CEO pay has been earned by more than a few average technology company workers who had stock options in the right company at the right time.
So, are CEOs overpaid compared to rank-and-file workers? If you read the media stories this year, and in previous years, you might conclude that they are. Some interest groups have determined that the ratio of CEO pay to average worker pay is an appropriate measure of this problem. Some Web sites allow you to calculate how underpaid you are compared with your CEO. According to these sources, chief executive pay is between 250 and 500 times that of the average worker.
If there is an excessive CEO pay problem, we won't fix the problem by measuring the wrong things and then misinterpreting flawed calculations.
Who are these CEOs who are purportedly paid hundreds of times more than the average worker? In most analyses, they are CEOs managing the largest public companies in America--usually the top 200 to 500. These are largest of the thousands of public corporations in the country. Given that executives typically earn more pay for managing larger organizations, we might expect these individuals to be at the top of the pay hierarchy.
It's more difficult to determine the relative value of the individuals in a job. Most CEOs I've dealt with are highly intelligent, have advanced degrees--often from one of the top universities in this country or elsewhere in the world--and have worked 70 or more hours per week for most of their career. Even if they weren't CEO of a public company, people with a background like that get paid much more than the average person.
Measuring worker pay If we want to understand the pay level of the average worker in America, we would have to ensure we included all forms of their pay--wage or salary, shift differential, overtime pay, bonuses, tips, commission, stock-based compensation, hiring bonuses, retention bonuses, and so forth. Without digressing into which data sources do and do not capture all of this (hint: none do), this would provide a good portrayal of how much the average worker is paid for his work. We would assume that this data reflects average performers with average levels of education, and so forth. But that's not the data that's being used in these comparisons.
I can't recall seeing a comparison of how much software engineers are paid compared with postal workers, or database administrators compared with bank tellers. This might mean that no one believes these would be relevant comparisons, because different jobs with different educational requirements and different levels of responsibility should be paid differently. We don't always know or agree how differently, but differently.
It still would be completely meaningless, however--just like comparing CEO pay to average worker pay.
I am in no way trying to serve as an apologist for high executive pay levels. After more than 20 years in the field of executive compensation, I have seen numerous examples of inappropriate pay for executives--not only in amount, but in reason and in form. Billions of dollars have been paid to thousands of executives who have destroyed companies and ruined workers' lives. I have seen executives join a company shortly before a takeover and get millions in "change in control" payments.
I also have seen numerous examples of inappropriate pay for nonexecutives--the so-called average worker. I have seen software sales representatives who made far too much commission due to a flawed incentive plan; a receptionist earning more than double the market rate because she had been with the company for decades, and there was no pay cap for any position; software engineers who joined a company at just the right time, and cashed out their stock options just before the stock price crashed and the company went out of business, due to a poorly developed software product.
Fixing the right problem If there is an excessive CEO pay problem, we won't fix the problem by measuring the wrong things and then misinterpreting flawed calculations. That only will encourage misguided legislation, and we've had plenty of that. It also might encourage big shareholders and their advisors to begin bullying companies into change using arbitrary standards, and we've had plenty of that, too.
Disclosure and publicity of pay allows us to identify the egregious situations and apply pressure to fix them, but only when the data seem accurate to reasonable people.
I just read that U2 made $260 million in gross receipts on their 2005 tour. That's $3 million per show (about $1 million per hour)--far above Motley Crue's $33 million for a similar number of shows (a paltry $400,000 per show, well under $200,000 per hour). I don't think most Americans want to impose an arbitrary cap on CEO pay any more than we want to impose a cap on U2's concert tour receipts because we know U2 would stop touring, and good CEOs would stop CEO-ing, and neither of those is to our benefit.
Let's focus on the real problem and not on concocted metrics rooted in sociopolitical sentiments. There is a lot of fixing needed in executive pay practices, and these average worker pay ratios have the potential to send us in the wrong direction.
I don't mind CEO's making more than I do. What gripes me is when their salaries are in the millions and they are getting annual bonuses while at the same time I am being told that the highest annual pay raise I can receive is 4%, which is less than the cost of living increase. What planet do you live on?
Are CEOs overpaid? Many people think so.
Many potential causes of overpayment have been identified: CEOs with too much power, inattentive boards of directors, conflicts of interest by compensation consultants, the use of stock options--the list goes on.
Some studies show the average CEO was paid $10 million to $15 million in 2005. This includes their salary, bonus, stock option gains, stock grants, and various executive benefits and perquisites.
Are rank-and-file workers underpaid? Everyone, I suppose, feels a little underpaid. Some data sources indicate the average American worker was paid about $40,000 in 2005. Anyone working in the technology sector knows this average pay level would barely hire a below-average administrative assistant in any of the technology hot spots in the U.S. And the average CEO pay has been earned by more than a few average technology company workers who had stock options in the right company at the right time.
So, are CEOs overpaid compared to rank-and-file workers? If you read the media stories this year, and in previous years, you might conclude that they are. Some interest groups have determined that the ratio of CEO pay to average worker pay is an appropriate measure of this problem. Some Web sites allow you to calculate how underpaid you are compared with your CEO. According to these sources, chief executive pay is between 250 and 500 times that of the average worker.
If there is an excessive CEO pay problem, we won't fix the problem by measuring the wrong things and then misinterpreting flawed calculations.
Who are these CEOs who are purportedly paid hundreds of times more than the average worker? In most analyses, they are CEOs managing the largest public companies in America--usually the top 200 to 500. These are largest of the thousands of public corporations in the country. Given that executives typically earn more pay for managing larger organizations, we might expect these individuals to be at the top of the pay hierarchy.
It's more difficult to determine the relative value of the individuals in a job. Most CEOs I've dealt with are highly intelligent, have advanced degrees--often from one of the top universities in this country or elsewhere in the world--and have worked 70 or more hours per week for most of their career. Even if they weren't CEO of a public company, people with a background like that get paid much more than the average person.
Measuring worker pay If we want to understand the pay level of the average worker in America, we would have to ensure we included all forms of their pay--wage or salary, shift differential, overtime pay, bonuses, tips, commission, stock-based compensation, hiring bonuses, retention bonuses, and so forth. Without digressing into which data sources do and do not capture all of this (hint: none do), this would provide a good portrayal of how much the average worker is paid for his work. We would assume that this data reflects average performers with average levels of education, and so forth. But that's not the data that's being used in these comparisons.
I can't recall seeing a comparison of how much software engineers are paid compared with postal workers, or database administrators compared with bank tellers. This might mean that no one believes these would be relevant comparisons, because different jobs with different educational requirements and different levels of responsibility should be paid differently. We don't always know or agree how differently, but differently.
It still would be completely meaningless, however--just like comparing CEO pay to average worker pay.
I am in no way trying to serve as an apologist for high executive pay levels. After more than 20 years in the field of executive compensation, I have seen numerous examples of inappropriate pay for executives--not only in amount, but in reason and in form. Billions of dollars have been paid to thousands of executives who have destroyed companies and ruined workers' lives. I have seen executives join a company shortly before a takeover and get millions in "change in control" payments.
I also have seen numerous examples of inappropriate pay for nonexecutives--the so-called average worker. I have seen software sales representatives who made far too much commission due to a flawed incentive plan; a receptionist earning more than double the market rate because she had been with the company for decades, and there was no pay cap for any position; software engineers who joined a company at just the right time, and cashed out their stock options just before the stock price crashed and the company went out of business, due to a poorly developed software product.
Fixing the right problem If there is an excessive CEO pay problem, we won't fix the problem by measuring the wrong things and then misinterpreting flawed calculations. That only will encourage misguided legislation, and we've had plenty of that. It also might encourage big shareholders and their advisors to begin bullying companies into change using arbitrary standards, and we've had plenty of that, too.
Disclosure and publicity of pay allows us to identify the egregious situations and apply pressure to fix them, but only when the data seem accurate to reasonable people.
I just read that U2 made $260 million in gross receipts on their 2005 tour. That's $3 million per show (about $1 million per hour)--far above Motley Crue's $33 million for a similar number of shows (a paltry $400,000 per show, well under $200,000 per hour). I don't think most Americans want to impose an arbitrary cap on CEO pay any more than we want to impose a cap on U2's concert tour receipts because we know U2 would stop touring, and good CEOs would stop CEO-ing, and neither of those is to our benefit.
Let's focus on the real problem and not on concocted metrics rooted in sociopolitical sentiments. There is a lot of fixing needed in executive pay practices, and these average worker pay ratios have the potential to send us in the wrong direction.
Why Departing Executives Don't Deserve Lavish Deals
Despite a rash of new corporate-governance guidelines, chief executives are still reaping huge severance deals, even when they are forced out.
Richard H. Brown, 55 years old, who was ousted in March as chairman and CEO of Electronic Data Systems, Plano, Texas, will receive severance totaling more than $32 million in cash and stock. The package will require the computer-services company to take a charge of six cents a share in the first quarter. EDS's share price, meanwhile, has fallen 75% in the past year as a push into the now troubled airline and telecommunications industries went awry. In addition, the Securities and Exchange Commission is investigating EDS's financial dealings and disclosures.
Milan Panic, 72, founder and decades-long CEO of ICN Pharmaceuticals, Costa Mesa, Calif., resigned in the summer of 2002 after his slate of directors was defeated in a proxy fight. He is still wrangling for a richer severance than is in his contract.
Under that agreement, he is entitled to receive a $5 million lump-sum severance payment and a $670,000 annual consulting fee for the remainder of his life. That is on top of the $33 million bonus Mr. Milan received in April 2002 after completing the sale to the public of a 20% stake in ICN's Ribapharm unit, which holds rights to a valuable drug used in treating hepatitis C.
Richard J. Kogan, 61, departing CEO of Schering-Plough, is entitled to receive $13.2 million in severance and $26.4 million in retirement payments when he steps down soon, despite a slumped share price and a pending SEC investigation at the pharmaceuticals company.
J. Harold Chandler, 53, fired recently as chairman and CEO of UnumProvident, the nation's largest disability-income insurer, will receive severance of $8.5 million and pension benefits of $8.5 million. Share price of the company, based in Chattanooga, Tenn., has plummeted in recent months as regulators question its claims-handling practices and investment portfolio.
Many of these severance deals, to be sure, were negotiated years ago when the CEOs were first recruited or promoted to the corner office, and can't be rescinded without a legal battle. "They are the residual effects of the boom years when CEOs were treated like star athletes and celebrities," says Carol Bowie, director of governance research services at the Investor Responsibility Research Center in Washington.
Yet corporate directors still haven't put the brakes on runaway executive pay and the practice of guaranteeing CEOs golden parachutes even before they prove their worth. They are out of step with investors and employees, who are angry over watching big payouts for sometimes inept performances, while their investments shrivel, their jobs are cut and they must leave their work with no package at all.
Their anger is showing up in a spate of shareholder resolutions aimed at restricting lush severance deals and seeking the right of investors to vote on golden parachutes.
Recently, Hewlett-Packard's shareholders narrowly approved a proposal urging directors to seek investor approval for any severance package valued at more than three times the executive's base salary plus bonuses. H-P said its board would "duly consider" the nonbinding recommendation, which is all it is required to do. CEO Carly Fiorina had opposed the proposal on the grounds that it could put the company's recruitment efforts at a "competitive disadvantage."
In March, shareholders at Tyco also passed a resolution seeking the right to vote on executive severance deals. Similar resolutions will be voted on soon at United Technologies, Citigroup and Alcoa. Ms. Bowie says she and her colleagues at the Investor Responsibility Research Center are monitoring such resolutions at a total of 18 companies this year. "It's a sign that boards are under more scrutiny -- but we're not yet out of the environment that anything goes when it comes to executive pay," she says.
More than limiting lush severance deals for executives, it's time to do away with them altogether. "If a prospective CEO on the way in to the job demands this, he or she may not be the right person to begin with," says Charles Elson, director of the University of Delaware business school's Weinberg Center for Corporate Governance.
He disagrees with Ms. Fiorina that eliminating severance will hurt companies' ability to attract executive talent. "I don't believe someone will turn down a top job offer because there is no guaranteed multimillion-dollar severance," he says. "Very few of us are assured that we will be paid for failure -- and directors have to start saying no, which takes some strength and independence."
That is what he and other directors at Nuevo Energy in Houston found when they recruited James L. Payne, 66, to become chairman, president and CEO two years ago. Mr. Payne, former vice chairman of Devon Energy, agreed to the take the job at Nuevo Energy without a severance agreement or other special perks. He also received Nuevo common stock, rather than cash, in compensation in 2002, equal to about $400,000 in salary and $200,000 in bonuses.
Richard H. Brown, 55 years old, who was ousted in March as chairman and CEO of Electronic Data Systems, Plano, Texas, will receive severance totaling more than $32 million in cash and stock. The package will require the computer-services company to take a charge of six cents a share in the first quarter. EDS's share price, meanwhile, has fallen 75% in the past year as a push into the now troubled airline and telecommunications industries went awry. In addition, the Securities and Exchange Commission is investigating EDS's financial dealings and disclosures.
Milan Panic, 72, founder and decades-long CEO of ICN Pharmaceuticals, Costa Mesa, Calif., resigned in the summer of 2002 after his slate of directors was defeated in a proxy fight. He is still wrangling for a richer severance than is in his contract.
Under that agreement, he is entitled to receive a $5 million lump-sum severance payment and a $670,000 annual consulting fee for the remainder of his life. That is on top of the $33 million bonus Mr. Milan received in April 2002 after completing the sale to the public of a 20% stake in ICN's Ribapharm unit, which holds rights to a valuable drug used in treating hepatitis C.
Richard J. Kogan, 61, departing CEO of Schering-Plough, is entitled to receive $13.2 million in severance and $26.4 million in retirement payments when he steps down soon, despite a slumped share price and a pending SEC investigation at the pharmaceuticals company.
J. Harold Chandler, 53, fired recently as chairman and CEO of UnumProvident, the nation's largest disability-income insurer, will receive severance of $8.5 million and pension benefits of $8.5 million. Share price of the company, based in Chattanooga, Tenn., has plummeted in recent months as regulators question its claims-handling practices and investment portfolio.
Many of these severance deals, to be sure, were negotiated years ago when the CEOs were first recruited or promoted to the corner office, and can't be rescinded without a legal battle. "They are the residual effects of the boom years when CEOs were treated like star athletes and celebrities," says Carol Bowie, director of governance research services at the Investor Responsibility Research Center in Washington.
Yet corporate directors still haven't put the brakes on runaway executive pay and the practice of guaranteeing CEOs golden parachutes even before they prove their worth. They are out of step with investors and employees, who are angry over watching big payouts for sometimes inept performances, while their investments shrivel, their jobs are cut and they must leave their work with no package at all.
Their anger is showing up in a spate of shareholder resolutions aimed at restricting lush severance deals and seeking the right of investors to vote on golden parachutes.
Recently, Hewlett-Packard's shareholders narrowly approved a proposal urging directors to seek investor approval for any severance package valued at more than three times the executive's base salary plus bonuses. H-P said its board would "duly consider" the nonbinding recommendation, which is all it is required to do. CEO Carly Fiorina had opposed the proposal on the grounds that it could put the company's recruitment efforts at a "competitive disadvantage."
In March, shareholders at Tyco also passed a resolution seeking the right to vote on executive severance deals. Similar resolutions will be voted on soon at United Technologies, Citigroup and Alcoa. Ms. Bowie says she and her colleagues at the Investor Responsibility Research Center are monitoring such resolutions at a total of 18 companies this year. "It's a sign that boards are under more scrutiny -- but we're not yet out of the environment that anything goes when it comes to executive pay," she says.
More than limiting lush severance deals for executives, it's time to do away with them altogether. "If a prospective CEO on the way in to the job demands this, he or she may not be the right person to begin with," says Charles Elson, director of the University of Delaware business school's Weinberg Center for Corporate Governance.
He disagrees with Ms. Fiorina that eliminating severance will hurt companies' ability to attract executive talent. "I don't believe someone will turn down a top job offer because there is no guaranteed multimillion-dollar severance," he says. "Very few of us are assured that we will be paid for failure -- and directors have to start saying no, which takes some strength and independence."
That is what he and other directors at Nuevo Energy in Houston found when they recruited James L. Payne, 66, to become chairman, president and CEO two years ago. Mr. Payne, former vice chairman of Devon Energy, agreed to the take the job at Nuevo Energy without a severance agreement or other special perks. He also received Nuevo common stock, rather than cash, in compensation in 2002, equal to about $400,000 in salary and $200,000 in bonuses.
How Overpaid CEOs Can Hurt Employees !!!
Too many chief executives still don't understand how they undermine investor trust and employee morale when they negotiate steep compensation deals for themselves, regardless of performance. And too often, directors go along with them, despite the current focus on corporate governance.
That is what dozens of readers said in response to my recent column on rich severance deals for recently fired CEOs. They offered thoughts on what must be done to restore trust in corporate management.
Here are some of their views.
All board directors know that the "necessary to recruit" argument (to justify executive compensation deals) is really bogus. There are lots of good managers, and a CEO's job is highly sought after.
There needs to be a serious effort to reverse the runaway growth of executive pay and pension schemes and, particularly, severance payments. It is just greed.
Who really deserves to earn more than a million dollars a year while their shareholders are getting poorer? A good start would be to ban interlocking directorships. Mutual back-scratching at our expense.
How do CEOs of big U.S. banks get away with paying themselves excessively while pleading "no contest" and paying hundreds of millions in fines for offenses that occurred while they were in charge? We, the shareholders, pay the fines and we should be able to penalize the management accordingly.
Charles BowenRetired CEOWilliamsburg, Va.
That is what dozens of readers said in response to my recent column on rich severance deals for recently fired CEOs. They offered thoughts on what must be done to restore trust in corporate management.
Here are some of their views.
All board directors know that the "necessary to recruit" argument (to justify executive compensation deals) is really bogus. There are lots of good managers, and a CEO's job is highly sought after.
There needs to be a serious effort to reverse the runaway growth of executive pay and pension schemes and, particularly, severance payments. It is just greed.
Who really deserves to earn more than a million dollars a year while their shareholders are getting poorer? A good start would be to ban interlocking directorships. Mutual back-scratching at our expense.
How do CEOs of big U.S. banks get away with paying themselves excessively while pleading "no contest" and paying hundreds of millions in fines for offenses that occurred while they were in charge? We, the shareholders, pay the fines and we should be able to penalize the management accordingly.
Charles BowenRetired CEOWilliamsburg, Va.
Are CEO's overpaid?
Are CEO's overpaid?
Tyler Cowen has a NY Times column supposedly offering a "contrarian" take on the issue (also see his blog post).
Cowen's viewpoint is that CEOs are paid according to their value, and I don't see why that's contrarian because it's the standard line spouted by pro-free market people.
The proper way to understand CEO pay is to look at it as a winner-takes-all market. A small increase in ability, or luck, results in massively greater earnings. So whether or not CEOs are overpaid depends on how you define "overpaid." Winner-takes-all markets happen to be a naturally occurring phenomena, but if you define "overpaid" as meaning someone makes far more money than someone else without actually contributing any additional value to the economy, then yes, CEOs are certainly overpaid.
As I explained in my post about baseball and Atlas Shrugged, the loss of the world's top baseball players would have little effect on the economy, and the same would apply to the loss of the highest paid CEOs. Other people would step into their roles, and it's doubtful that there would be any noticeable ability difference between the two.
We don't even know how good the selection criteria are for CEOs. Maybe the skills and abilities needed to get hired are not the same skills and abilities need to do the job? In fact, it seems likely to me that in order to make the really big bucks as CEO one must focus on self-promotion at the expense of the interests of shareholders. So by the very nature of the selection process, the highest paid CEOs are inevitably not the best people for the job.
Tyler Cowen explains that CEO pay has risen with market capitalization of companies. Some commenters to his blog have asked why the CEO pay should rise based on external factors (such as the increase in the P/E ratios of all publicly traded companies) which the CEO has no contol over? If CEO pay is based on their contribution to the economy, then they shouldn't get any more money for doing the same job they were doing before. But in fact, CEO pay is not based on what they contribute, but rather what's available in the pool. So rising market capitalizations increase the amount of money available for CEOs to take from the pool. In the same manner, increased profits for baseball enable the best baseball players to earn more money even though their batting average hasn't changed. Increased box office revenues enable the most popular actors to make more money even though their acting skills remain constant.
It's certainly understandable for the average worker to feel that winner-takes-all compensation schemes are unfair, because the people at the top are gettinging paid for all the hard work of the people at the bottom who receive little benefit from the increasing fortunes of their employers.
Tyler Cowen has a NY Times column supposedly offering a "contrarian" take on the issue (also see his blog post).
Cowen's viewpoint is that CEOs are paid according to their value, and I don't see why that's contrarian because it's the standard line spouted by pro-free market people.
The proper way to understand CEO pay is to look at it as a winner-takes-all market. A small increase in ability, or luck, results in massively greater earnings. So whether or not CEOs are overpaid depends on how you define "overpaid." Winner-takes-all markets happen to be a naturally occurring phenomena, but if you define "overpaid" as meaning someone makes far more money than someone else without actually contributing any additional value to the economy, then yes, CEOs are certainly overpaid.
As I explained in my post about baseball and Atlas Shrugged, the loss of the world's top baseball players would have little effect on the economy, and the same would apply to the loss of the highest paid CEOs. Other people would step into their roles, and it's doubtful that there would be any noticeable ability difference between the two.
We don't even know how good the selection criteria are for CEOs. Maybe the skills and abilities needed to get hired are not the same skills and abilities need to do the job? In fact, it seems likely to me that in order to make the really big bucks as CEO one must focus on self-promotion at the expense of the interests of shareholders. So by the very nature of the selection process, the highest paid CEOs are inevitably not the best people for the job.
Tyler Cowen explains that CEO pay has risen with market capitalization of companies. Some commenters to his blog have asked why the CEO pay should rise based on external factors (such as the increase in the P/E ratios of all publicly traded companies) which the CEO has no contol over? If CEO pay is based on their contribution to the economy, then they shouldn't get any more money for doing the same job they were doing before. But in fact, CEO pay is not based on what they contribute, but rather what's available in the pool. So rising market capitalizations increase the amount of money available for CEOs to take from the pool. In the same manner, increased profits for baseball enable the best baseball players to earn more money even though their batting average hasn't changed. Increased box office revenues enable the most popular actors to make more money even though their acting skills remain constant.
It's certainly understandable for the average worker to feel that winner-takes-all compensation schemes are unfair, because the people at the top are gettinging paid for all the hard work of the people at the bottom who receive little benefit from the increasing fortunes of their employers.
Who's the most overpaid CEO? The most underpaid?
Boston Business Journal - August 26, 2004
by Tom Witkowski
Boston Business JournalWe list the highest-paid CEOs and rank them according to how their company performed compared with their peers'
During the past three years, as Cognex Corp.'s annual revenue dropped 19 percent then climbed back to above its 2001 level, CEO Robert Shillman went home without a paycheck.
Shillman forfeited his salary for two of those years as Natick-based Cognex, which sells machine vision systems used in making semiconductors -- suffered through a chip industry slowdown, putting him among the five most underpaid CEOs in Massachusetts.
In a study of CEO compensation, the Boston Business Journal examined the 100 highest-paid CEOs in Massachusetts and ranked them according to the performance of their companies. The result appeared in our CEOs of Massachusetts supplement to the BBJ. It showed which CEOs were paid handsomely while running companies that did poorly last year -- landing those CEOs in the category of overpaid executives -- and also showed which CEOs were more modestly compensated while leading their firms to stellar heights, becoming the region's "underpaid" CEOs.
The criteria for the rankings compared each CEO's pay against that of the other top 100 paid CEOs. Then we ranked their companies' performances against each other. To determine whether a CEO was relatively overpaid, fairly paid or underpaid, we subtracted each CEO's pay rank from his or her company's combined performance rank to find a resulting pay/performance figure. See the chart below.
For example, Shillman's compensation put him among the top five underpaid chief executives in terms of pay vs. company performance: His company's performance was 30th out of 100 companies, but among the highest paid execs, Shillman was listed at 97 -- a differential of 67, a gap bested by only four other execs on our list.
The Cognex CEO's compensation last year totaled $574,295, most of it coming from exercised stock options. He also received a $21,450 bonus from the company. Shillman's most recent annual salary, $89,190 in 2001, is low compared to the six- and seven-figure standards set by his peers. His decision to go without that salary also sets him apart from his local corner-office colleagues.
Likewise, Candela Corp. CEO Gerard Puorro's compensation put him at the bottom of the list among the 100 highest-paid chief execs, yet his Wayland-based laser company's performance was near the top, ranked fourth in our performance index, which took into account revenue growth, return on equity and stock appreciation.
With comparatively low compensation in a year his company did so well, at $649,939, he was (relatively speaking) the most underpaid chief executive in Massachusetts. In 2002, Puorro recommended his salary be lowered as a cost-cutting measure. His salary was restored to its previous level last year as the company became profitable again. Exercising options
Exercised stock options were a portion of the compensation of many underpaid and overpaid CEOs in Massachusetts in 2003. Despite possible changes in corporate accounting that would mandate expensing stock options, executive pay experts said that those options remain part of companies' compensation plans for now. And in a year when the public markets were on the upswing, as in 2003, option grants from earlier years gave some CEOs the extra fuel to make it to the top of the pile of overpaid CEOs.
Vertex Pharmaceuticals Inc. CEO Joshua Boger went home with $2.1 million in total compensation, ranking him 34th on the list of top-paid CEOs. His Cambridge-based drug company, however, finished last as No. 100 in terms of performance. Boger realized $1.5 million from the sale of stock, on top of his $525,000 salary. But Boger also asked not to receive a bonus for the year, even though the compensation committee of his company's board of directors evaluated his performance as "excellent" for the year, according to the 2003 proxy statement.
"The committee and the full board of directors' subjective view of Dr. Boger has consistently been that he is an outstanding scientist who has demonstrated exceptional ability to guide the company and to manage well not only the company's scientific progress, but its strategic business efforts," the committee said in the filing with the U.S. Securities and Exchange Commission.
Arnold Zetcher, CEO of Hingham-based clothing retailer Talbots Inc., went home last year with $7.4 million in total compensation, $5.3 million of it from options exercised and $809,000 of it in bonus. When you consider the company's performance, that pay scale stamps Zetcher's ticket into the overpaid club.
When a significant portion of an executive's compensation comes from exercising options, the argument can be made that the return is partially compensation and partially a return on investment, said William Caporizzo, co-chair of the tax department with William Cutler Pickering Hale and Dorr LLP.
"The new accounting rules would argue that if we're going to expense options based on the value on the day it was granted, that's the compensation. Anything beyond that is more investment," Caporizzo said, referring to yet-to-be implemented rules.
Larry Liebenow, the chief executive of textile manufacturer Quaker Fabric Corp., has the distinction of being the most overpaid CEO in the state, according to our rankings, with the bulk of Liebenow's 2003 compensation coming from $2.2 million in exercised options.
Among the companies of the 100 top-paid chief executives, Fall River-based Quaker ranked No. 92 for its 2003 performance. Liebenow's pay, however, came in at No. 23 on the compensation list.
Boston-based State Street Corp.'s David Spina, with $7.1 million in compensation, was the No. 8 highest-paid CEO, and Boston-based Nstar's Thomas May, with $4 million, was the No. 14 highest-paid CEO. When the performance of State Street and Nstar is taken into consideration, both Spina and May were also overpaid: State Street's performance ranking was 67th out of the 100 and Nstar's ranking landed at No. 71, according to our research.
Despite the potential changes in how they account for options, companies are in a holding pattern and not making any sudden moves to eliminate stock options. Under today's accounting rules, options are not considered an expense, and thus, are a long-term incentive for an executive and still considered free for the company, experts said.
"Make the expensing happen and I think you'll end up with a more rational compensation environment that allows boards and executives to really evaluate the strategic usefulness of each instrument, without the problem that one of the instruments is free and all the others aren't," said Joseph Rich, Marlborough-based vice chairman of Pearl Meyer & Partners, which counsels boards of directors on compensation.
Change is coming, however. The current trend is toward offering executives a mix of stock options and restricted stock. An analysis of 2004 proxy statements by Pearl Meyer showed that executives last year took home 23 percent more in cash and restricted stock, although their total compensation fell.
by Tom Witkowski
Boston Business JournalWe list the highest-paid CEOs and rank them according to how their company performed compared with their peers'
During the past three years, as Cognex Corp.'s annual revenue dropped 19 percent then climbed back to above its 2001 level, CEO Robert Shillman went home without a paycheck.
Shillman forfeited his salary for two of those years as Natick-based Cognex, which sells machine vision systems used in making semiconductors -- suffered through a chip industry slowdown, putting him among the five most underpaid CEOs in Massachusetts.
In a study of CEO compensation, the Boston Business Journal examined the 100 highest-paid CEOs in Massachusetts and ranked them according to the performance of their companies. The result appeared in our CEOs of Massachusetts supplement to the BBJ. It showed which CEOs were paid handsomely while running companies that did poorly last year -- landing those CEOs in the category of overpaid executives -- and also showed which CEOs were more modestly compensated while leading their firms to stellar heights, becoming the region's "underpaid" CEOs.
The criteria for the rankings compared each CEO's pay against that of the other top 100 paid CEOs. Then we ranked their companies' performances against each other. To determine whether a CEO was relatively overpaid, fairly paid or underpaid, we subtracted each CEO's pay rank from his or her company's combined performance rank to find a resulting pay/performance figure. See the chart below.
For example, Shillman's compensation put him among the top five underpaid chief executives in terms of pay vs. company performance: His company's performance was 30th out of 100 companies, but among the highest paid execs, Shillman was listed at 97 -- a differential of 67, a gap bested by only four other execs on our list.
The Cognex CEO's compensation last year totaled $574,295, most of it coming from exercised stock options. He also received a $21,450 bonus from the company. Shillman's most recent annual salary, $89,190 in 2001, is low compared to the six- and seven-figure standards set by his peers. His decision to go without that salary also sets him apart from his local corner-office colleagues.
Likewise, Candela Corp. CEO Gerard Puorro's compensation put him at the bottom of the list among the 100 highest-paid chief execs, yet his Wayland-based laser company's performance was near the top, ranked fourth in our performance index, which took into account revenue growth, return on equity and stock appreciation.
With comparatively low compensation in a year his company did so well, at $649,939, he was (relatively speaking) the most underpaid chief executive in Massachusetts. In 2002, Puorro recommended his salary be lowered as a cost-cutting measure. His salary was restored to its previous level last year as the company became profitable again. Exercising options
Exercised stock options were a portion of the compensation of many underpaid and overpaid CEOs in Massachusetts in 2003. Despite possible changes in corporate accounting that would mandate expensing stock options, executive pay experts said that those options remain part of companies' compensation plans for now. And in a year when the public markets were on the upswing, as in 2003, option grants from earlier years gave some CEOs the extra fuel to make it to the top of the pile of overpaid CEOs.
Vertex Pharmaceuticals Inc. CEO Joshua Boger went home with $2.1 million in total compensation, ranking him 34th on the list of top-paid CEOs. His Cambridge-based drug company, however, finished last as No. 100 in terms of performance. Boger realized $1.5 million from the sale of stock, on top of his $525,000 salary. But Boger also asked not to receive a bonus for the year, even though the compensation committee of his company's board of directors evaluated his performance as "excellent" for the year, according to the 2003 proxy statement.
"The committee and the full board of directors' subjective view of Dr. Boger has consistently been that he is an outstanding scientist who has demonstrated exceptional ability to guide the company and to manage well not only the company's scientific progress, but its strategic business efforts," the committee said in the filing with the U.S. Securities and Exchange Commission.
Arnold Zetcher, CEO of Hingham-based clothing retailer Talbots Inc., went home last year with $7.4 million in total compensation, $5.3 million of it from options exercised and $809,000 of it in bonus. When you consider the company's performance, that pay scale stamps Zetcher's ticket into the overpaid club.
When a significant portion of an executive's compensation comes from exercising options, the argument can be made that the return is partially compensation and partially a return on investment, said William Caporizzo, co-chair of the tax department with William Cutler Pickering Hale and Dorr LLP.
"The new accounting rules would argue that if we're going to expense options based on the value on the day it was granted, that's the compensation. Anything beyond that is more investment," Caporizzo said, referring to yet-to-be implemented rules.
Larry Liebenow, the chief executive of textile manufacturer Quaker Fabric Corp., has the distinction of being the most overpaid CEO in the state, according to our rankings, with the bulk of Liebenow's 2003 compensation coming from $2.2 million in exercised options.
Among the companies of the 100 top-paid chief executives, Fall River-based Quaker ranked No. 92 for its 2003 performance. Liebenow's pay, however, came in at No. 23 on the compensation list.
Boston-based State Street Corp.'s David Spina, with $7.1 million in compensation, was the No. 8 highest-paid CEO, and Boston-based Nstar's Thomas May, with $4 million, was the No. 14 highest-paid CEO. When the performance of State Street and Nstar is taken into consideration, both Spina and May were also overpaid: State Street's performance ranking was 67th out of the 100 and Nstar's ranking landed at No. 71, according to our research.
Despite the potential changes in how they account for options, companies are in a holding pattern and not making any sudden moves to eliminate stock options. Under today's accounting rules, options are not considered an expense, and thus, are a long-term incentive for an executive and still considered free for the company, experts said.
"Make the expensing happen and I think you'll end up with a more rational compensation environment that allows boards and executives to really evaluate the strategic usefulness of each instrument, without the problem that one of the instruments is free and all the others aren't," said Joseph Rich, Marlborough-based vice chairman of Pearl Meyer & Partners, which counsels boards of directors on compensation.
Change is coming, however. The current trend is toward offering executives a mix of stock options and restricted stock. An analysis of 2004 proxy statements by Pearl Meyer showed that executives last year took home 23 percent more in cash and restricted stock, although their total compensation fell.
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