Sunday, September 5, 2004

Spare change


Nuggets from the proxy statements

For security reasons, Procter & Gamble Co. CEO A.G. Lafley is required to use company aircraft for all his personal travel. That's not uncommon among big companies, but P&G charges Lafley for that travel - the equivalent of a first-class plane ticket, plus 40 percent. Lafley has spent $151,000 from 2001 to 2003 on that travel. Even when he flies on business, there is a cost: P&G's unwritten rule is that the most senior executive on the plane serves drinks and food. More Pringles, anyone?

Big sales

Sales people are the infantrymen of American capitalism, yet some of them make enough money to buy their own Humvees. At a few local companies, sales people earned enough to have their compensation disclosed in company filings. Here's a look at what they made in salary, bonus, commission and other pay:

• Pomeroy IT Solutions: Colin Braithwaite, $358,853; and Jack Wallin, $331,988.

• Western and Southern Life Insurance: Charles Smith, $265,947; Dang Her, $186,488; and Casimir Baczynski, $178,571.

Loan program suffered

A few years back, General Cable Corp. thought it would be a good idea to lend money to executives so they could buy company stock. "Management believes that increasing the shareholdings of executive officers through the (loan program) will further motivate the officers to take actions to enhance shareholder value," the company said. It's a great program, but only if the stock price rises. It didn't. General Cable stock was $30 a share in 1998, but fell below $3 in 2002. CEO Gregory Kenney had borrowed $752,909 to buy stock. In June 2003, when the stock was $5 a share, he paid the loan back. A month later, the company paid him a "retention bonus" of $745,000 - about what the loan was worth.

Tax cuts paid off

The Bush tax cuts paid off big for two of the president's biggest local backers - Carl Lindner Jr. and Richard Farmer. Both are Bush "Rangers" who have given at least $200,000 to the president's election war chest. They also were the two largest individual campaign donors to GOP causes in the last election cycle. The Jobs and Growth Tax Relief Reconciliation Act of 2003 cut the tax rate on stock dividends to 15 percent. In 2003, Lindner earned an estimated $5.8 million on the dividends from his American Financial Group and Provident Financial Group stock. Before the tax cut, he would have paid taxes of $2.2 million on it, at the top marginal rate of 38.6 percent. The tax cut would have reduced that by $1.4 million. Lindner made $1.3 million in the 2002 election cycle, 90 percent of it to Republicans causes, according to the Center for Responsive Politics.

Farmer, chairman at Cintas Corp., gave $1.1 million, 99 percent to Republicans. Cintas stock paid him about $6.2 million in dividends in 2003, and the tax cut means he would have paid nearly $1.5 million less in taxes on those dividends.

Where's the Enquirer?

This report doesn't list Enquirer employees; here's why.

The Securities and Exchange Commission requires companies with publicly held stock or debt to disclose the compensation of their five highest-paid executives. Gannett Co. Inc. of McLean, Va owns the Enquirer. No Enquirer employee is among that group in Gannett.

Former Enquirer publisher Gary Watson, who now oversees all of Gannett's newspapers, last year was paid $1.4 million in salary and bonus, and cashed in $7.1 million in options in 2003. Gannett CEO Douglas McCorkindale was paid a salary and bonus of $3.8 million, and cashed in options worth $10.7 million.




EXECUTIVE PAY
A bountiful harvest
72 in the $1 million club
Among top executives, white males dominate
Guide to rankings
The method behind the numbers
Top officer earnings for P&G, Cintas
Spare change: Nuggets from the proxy statements

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