Stardate 20010814.0738 (On Screen): Executive compensation in this country is completely out of control. Case in point: one Richard McGinn is generally credited with taking Lucent and driving it into the ground. The board booted him out of his CEO position last November. Now his golden parachute has been revealed, and it's a good'n. One of the things which stock holders do think is a good idea is that a CEO should receive a big stock option package when hired, with a strike price based on stock price the day he begins. The idea is that if he makes out like a bandit on his options, he does so by making the stock price go up, which also benefits the stockholders. McGinn had a big package of options, but the strike price was $29. Since Lucent's stock has sunk to less than $7, they're worthless -- and that's as it should be. Only they're not; as a favor to their good friend McGinn, the board bought the options back for $7 million. That defeats the purpose of using options as an incentive to the CEO, don't you think?
Meanwhile, Lucent also booted its CFO after only a year in the position. She was paid a $4 million signing bonus when she joined the company, and got an additional $4.7 million in her golden parachute. When did we start paying people millions of dollars per year to do a shitty job? (Where do I sign up?) If I were a Lucent stockholder, I think I'd want to ask the Board a few pointed questions about how it was managing the corporations's cash. (discuss)
