Monthly Archives: April 2013

Action, Political

CEOs Earn 354 Times More Than Average Worker

     Chief executives of the nation’s largest companies earned an average of $12.3 million in total pay last year — 354 times more than a typical American worker, according to the AFL-CIO.  
     The average worker made $34,645 last year, according to the group that represents over 50 trade unions.
     Oracle (ORCL) CEO Larry Ellison’s $96.1 million pay package topped the list, followed by $54.3 million earned by Credit Acceptance Corp.’s (CACC) Brett Roberts and Discovery Communications (DISCA) CEO David Zaslav’s $50 million, according to the union’s pay project.
     The one stand out was Apple (AAPL) CEO Timothy Cook, whose pay dropped to $4.2 million from $376 million in 2011, when his compensation package got a boost from long-term stock awards.
     The dip in Cook’s pay was enough to lower the overall average for CEOs of top companies by 5% from 2011.
     The discrepancy in pay between CEOs and the average worker has skyrocketed over the years, peaking in 2000, when the gap was 525 times. In 1980, CEO pay was 42 times that of the average worker.
     The AFL-CIO each year highlights the pay disparity between workers and chief executives from companies that are part of Standard & Poor’s 500 stock index.
     Richard Trumka, AFL-CIO president, said he hopes the project will remind Washington leaders that most workers “continue to struggle.”
     “They struggle every day to make ends meet, their wages are stagnant, their companies are trying to take away their health care and pensions, and they’re angry,” Trumka said. “And very few them know what’s happening with CEO (pay).”
     The union wants regulators to enforce an outstanding rule from Wall Street reforms for publicly traded companies to reveal CEO pay compared to their average employees. The U.S. Securities and Exchange Commission has delayed efforts to craft that rule, in part because of heavy lobbying by companies.
     The labor group unveiled an updated website database on Monday compiled from 327 companies based on SEC filings. The site will post CEO pay for all 500 companies as the data is made public.
     Trumka himself makes $302,000 in total compensation, according to federal records, or 8.7 times the average worker.
     Tita Freeman, spokeswoman for CEO lobbying group The Business Roundtable, would not comment on the pay gap. She said CEOs represented by her group support efforts to tie executive pay to performance. 

Action

CEO Pay and You


           

Running out of yacht polish. Having to find a new butler. The dilemma of whether to vacation at your Vail or Hamptons estate. It must be hard to be a super-rich CEO.

Today, we’re adding something truly stressful to their list: the launch of our updated Paywatch website.

We’re exposing the outrageous pay and retirement packages of many of the richest CEOs and showing the absurd tax-dodging tactics their companies get away with, all while many of them push the rest of us to accept cuts to Social Security, Medicare and Medicaid benefits.

Let’s make this Tax Day the day CEOs fear. Go to www.Paywatch.org now to check out how corporations and their top executives are running amok, and spread the word to your friends.


You know the story. While workers’ wages have stagnated, CEO pay has skyrocketed—and their greed has created the economic mess we’re only starting to get out of.

They’ve used their power at the corporations they run to ship millions of jobs overseas.

Now, they’re putting their immense wealth into efforts to get politicians to cut Social Security, Medicare and Medicaid benefits—through shady front groups like the Campaign to Fix the Debt and the Business Roundtable—and to keep the lavish tax loopholes for Wall Street and themselves and their rich buddies.

It’s pretty despicable.

This Tax Day, let’s expose the problem of CEOs gone wild and make sure everyone knows corporate greed is to blame for our economic crisis, not working families. Visit Paywatch now.

In Solidarity,

Nicole
———————————
Nicole Aro
Director of Digital Strategies, AFL-CIO


Retirement, Union, UPS

Proposal on Healthcare


Are UPS Teamsters Headed to Central States Health Fund?



UPDATED April 12, 2013: Are UPS Teamsters presently in company plans heading for the Central States Health and Welfare Fund? That’s one proposal that UPS management has put on the table.
     The International Union called a two-week break in negotiations to study this issue. So far, UPS Teamsters have only been told that management has proposed moving all UPS Teamsters into a union health and welfare plan.
     Meanwhile, the Central States Health and Welfare Fund seems to be preparing to go national. The fund is even planning to drop the Central States name and perhaps rebrand itself as MyTEAMCare.
     UPS wants to get retiree healthcare costs off of its balance sheets because of legal accounting changes. But how would switching to the Central States Health Fund affect Teamster members?
     There’s no word yet on that from the IBT. Bargaining resumes on April 15.
      Unlike the Central States Pension Fund, the Health and Welfare Fund is in good financial shape. It has 19 months of reserves, which is considered very healthy.
     UPS Teamsters who are currently in this plan pay no monthly premiums. UPS retirees in this fund pay $200 per month for retiree coverage and $400 for retiree-plus-spouse coverage.
     Switching UPS Teamsters into Teamster health plans may benefit members and our union. But UPSers have lots of questions, and they deserve answers.
     Healthcare affects members and our families directly and personally. If major changes are in store for our health coverage, UPS Teamsters deserve full disclosure—all the facts and all the options—before any contract vote.
     Click here to see a summary of Central States healthcare coverage with co-pay and deductible information. The C-6 plan is the top coverage currently available to Teamsters in the Central States.

UPS

Familiar Names for Succession of UPS CEO



   By Mary Jane Credeur – Mar 28, 2013 2:12 PM MT

  Since founder Jim Casey left United Parcel Service Inc. (UPS) after more than five decades in charge, the company’s chief executive officers have served for an average of 5 1/2 years. Scott Davis reaches that milestone in June.
     That means a leadership change is probably approaching at the world’s largest package-delivery operator, according to Kevin Sterling of BB&T Capital Markets and other analysts. A new CEO almost certainly will come from within, as have all the previous chiefs, Sterling said.  







UPS’s Davis Nears Typical CEO Tenure as Kuehn Seen Next

 
     If UPS follows its historical pattern, a new successor will be named within 12 months. Photographer: Ken James/Bloomberg
     Transitions since Casey’s 1962 exit have earned UPS a reputation for stability in a situation yet to be faced by FedEx Corp. (FDX), which Fred Smith has led since starting the carrier in 1971. UPS promoted Davis, 61, from chief financial officer and current CFO Kurt Kuehn is the likeliest to succeed him, said Sterling and David Campbell of Thompson Davis & Co.
     “They’re always looking at candidates and everyone is cross-trained and they can do each other’s jobs,” said Jeff Sonnenfeld, a senior associate dean at the Yale University School of Management who has known every CEO at UPS since the 1970s. “This succession process started even before Scott was named CEO. And the same for the next CEO.”
     Davis has led Atlanta-based UPS to a return of 21 percent since taking charge, compared with 10.1 percent at FedEx and 6.9 percent for the Standard & Poor’s 500 Index. UPS climbed 0.6 percent to $85.90 at the close of New York trading today.
     Crisis Element
     “At so many companies these days, succession has an element of crisis, but it never has at UPS and probably never will,” said Sonnenfeld, who’s
based in New Haven, Connecticut. 
     Among the signals that the CEO is considering retirement is his inclusion on the past two earnings conference calls of executives whom analysts have identified as potential successors, such as Alan Gershenhorn, the sales chief, and U.S. President Myron Gray.
     Every other earnings call since Davis became CEO in January 2008 was limited to him, CFO Kuehn and the head of investor relations.
     “You can almost read it like it’s an audition,” said BB&T Capital Markets’ Sterling, who’s based in Richmond, Virginia, and recommends buying the shares.
     Davis has navigated the global financial crisis and the 5.16 billion-euro ($6.59 billion) bid for TNT Express NV (TNTE) that collapsed in January. Mapping a growth strategy in the deal’s aftermath is among the challenges his successor will inherit.


Identified Early


UPS declined to make its executives available to comment for this article.
     “UPS is disciplined and deliberate in its succession planning and the development of its leadership, including when and how senior leadership changes are made,” said Malcolm Berkley, a spokesman.
     It’s premature to presume when succession will happen, or that there’s a targeted length of service UPS tries to achieve, he said. The board routinely reviews succession plans to ensure candidates are identified early and given the opportunity to demonstrate their skills, Berkley said.
     Casey headed UPS for 55 years after its founding in Seattle in 1907 as American Messenger Co. The average tenure for the eight former CEOs since he stepped down in 1962 has been five years and six months, according to data provided by UPS and compiled by Bloomberg.


Average Tenure


James Kelly, who was CEO when the company went public in 1999, served exactly five years before leaving in December 2001. His successor, Michael Eskew, held the post for six years, leaving in December 2007. Before that, the longest-serving CEO after Casey was George Smith, who held the job for almost 10 years and stepped down in February 1972.
     At FedEx, Smith said in September 2010 that he “almost certainly” would leave within five years. In 2012, the 68-year- old founder, chairman, CEO and president said he’s “not planning on going anyplace” imminently.
      UPS’s Kuehn, 58, started as a driver 3 1/2 decades ago and was senior vice president of global sales and marketing before being elevated to CFO.
     That promotion allowed Gershenhorn to take Kuehn’s old job. Gershenhorn, 54, and Gray, 55, also began their careers with UPS in the late 1970s as part-time package handlers.


Wall Street


Wall Street has known Kuehn for about 15 years, since he was UPS’s first vice president of investor relations, a role he was holding when the company went public in 1999.
     Kuehn, pronounced KEW-in, attended Yale, received a master’s in business administration from the University of Miami and is a graduate of the Advanced Management Program of the Wharton School of Business at the University of Pennsylvania, according to a biography on UPS’s website.
     He sits on the boards of NCR Corp. (NCR), the Metro Atlanta Chamber of Commerce, the Woodruff Arts Center and the Foundation for Independent Higher Education.
     If UPS follows its historical pattern, a new successor will be named within 12 months.
     Kuehn has had “years of experience, and he’s probably the next guy to move up,” said Campbell, who recommends buying the stock.
     Davis will probably remain CEO until a new contract with the Teamsters union is completed, Sterling said. The current contract expires in July, and Davis said in January he hopes for an early conclusion to negotiations.


First Outsider


The departure of Eskew, Davis’s predecessor, was announced just two weeks after the completion of a Teamsters’ contract in 2007 — 10 months before the existing agreement expired. Davis was considered UPS’s first outsider when he was promoted, although he had worked at the company for 20 years at the time. Before that, he was CEO of an Oregon-based technology company called II Morrow that UPS bought in 1986.
     “By the end of this year is probably the time” for a new CEO, said Campbell.
     Indeed, the three CEOs before Davis all left at the end of calendar years, and their successors took over on New Year’s Day.
     UPS is so consistent and reliable with succession planning that most executives look “shockingly young” when they retire, often around age 60, said Yale’s Sonnenfeld.
     “They start so early and retire relatively early and there’s this unusual quality in these guys when they retire, a Dorian Gray thing,” Sonnenfeld said, referring to the Oscar Wilde character who doesn’t age.