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It's So Hard To Think Like A Corporate Bigwig
Published on Saturday, September 2, 2000 in the Boulder Daily Camera
It's So Hard To Think Like A Corporate Bigwig
by Christopher Brauchli
I knew there was a reason I make my living in a capacity other than that of chief executive of a large corporation. I am lacking in creativity.

It would, for example, never have occurred to me to reward Dick Cheney, once the presumed next vice-president of the United States, with 400,000 more stock options than any other person in his position with Haliburton Company would have been entitled to had he or she left the company earlier than anticipated to go into a new line of work.

Mr. Cheney's employment contract provided that if he worked until age 62 he would be entitled to 400,000 more stock option than he was entitled to if he left at age 59. When he decided to go into a new business at age 59, however, the board of directors of the company concluded that it would treat him differently from any other employee and accelerate his qualification for those options. The board of directors also permitted him to keep 140,000 shares of stock with a present value of approximately $7.5 million that it was entitled to cancel when he took early retirement. It's possible that the directors were glad he left and they didn't want to do anything to discourage his departure. (During the time Mr. Cheney was head of Haliburton the price of Haliburton shares increased by 110 percent, while in the same period shares in other oil service industry stocks increased on an average by 158 percent. Other Haliburton executives may soon contemplate early retirement now that they see how handsomely their board of directors rewards a really mediocre executive. (Mr. Cheney took issue with a New York Times article that, in manner unflattering, described the performance of Haliburton on Mr. Cheney's watch. He did not explain why he was entitled to treatment that no other executives at that company could have expected, had they taken early retirement.

I would not have thought to do what Jim Goodwin, chairman of United Airlines, did. During the summer of 2000, cancellations and delays on United Airlines flights were rampant because the airline (which is 55 percent owned by its employees) could not agree with itself how to resolve certain employment issues. In August alone there were an average of 200 flight cancellations a day plus countless delays. That means approximately 40,000 people each day were extremely annoyed at having their flights cancelled or approximately 1,200,000 during the month of August alone. That does not include people who were somewhat annoyed because their flights were delayed but less annoyed than those whose flights were cancelled.

Mr. Irwin came up with a solution for the irate customer that would never have occurred to me. He ran a full page ad in the New York Times. In the ad he showed a typical flight information board on which 13 flights were displayed. Four were described as "on time," five were described as "delayed" and four weredescribed as "cancelled." In bold letters the ad quotes Mr. Goodwin saying: "This isn't getting us where we want to go." He explains that United Airlines has high standards and no one is tougher on "them" than they are on themselves. He says United flights "have been delayed and cancelled at an unprecedented, and embarrassing rate." To that ad a teen-ager would reply: "Duh." Had I been the chief executive, it would not have occurred to me to publish a full page ad at great expense telling the public what it already knew. I would have saved the money.

It would not have occurred to me to sue Ralph Nader — especially if I were one of the least loved companies in the United States, a credit card company. Credit card companies are the companies that invite the indigent to obtain free credit cards even when they have outstanding balances on existing cards they are unable to pay. People with less money than they wish, being unable to resist the temptation to buy what they can't afford, take advantage of the offers, acquire what they shouldn't have and incur additional debt they cannot afford to repay, all of which brings joy to the hearts of the credit card companies that charge interest at a rate that no financially savvy person would consider paying. To make sure their customers do not take the easy way out when they find themselves with more debt than they can repay, the credit card companies have been among the leaders of companies lobbying Congress to change the bankruptcy laws so that credit card debtors will have a more difficult time finding relief through bankruptcy.

Represented by a group of lawyers whose love of fees is greater than their common sense, Master Card has started a lawsuit against Mr. Nader seeking $5 million in damages. The damages are sought because Mr. Nader has run an ad that is a parody of a MasterCard ad. MasterCard is deathly afraid that as a result of this parody, its customers will believethat MasterCard is endorsing Mr. Nader. It is also upset because it believes Mr. Nader is infringing on its copyright. Were I an executive in MasterCard I would have said if we needed to give our lawyers work, we should send them after some of our customers who can't afford to pay what they owe. I would never, in my wildest dreams, have thought of suing Mr. Nader.

Perhaps the chief executives of these three companies can take out a full page ad in the New York Times and explain to their shareholders what else they have done recently to earn their salaries.

Copyright 2000 The Daily Camera


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