Bush’s Gift to CEOs

Stories collide on a Wednesday, with the SEC changing a rule made in July that would have allowed stockholders to know exactally how much compensation their executives were receiving in the form of stock options. On a Friday, with no prior public notification, the federal agency changed the requirement in a way that allows executives to continue hiding this compensation from investors. For a bird’s eye view of how anti-investor this rule change happens to be, let’s take a look at the $198 million dollar compensation package Hank McKinnell, now ex-CEO of Pfizer, is walking out the door with. Nevermind the fact that his leadership led to a 40% loss in the stock’s value over five years, how about the purposely confusing clumps of stock he will be receiving as he leaves? $20.7 million, $18.3 million, $5.8 million – to go along with a pension estimated to be worth $82 million – and many more itemized rewards that shareholders were most likely unaware of until they were announced last week.

Had shareholders been aware of McKinnell’s ability to extract 1/5th of a billion dollars from them regardless of his performance, would it have taken this long to force him out? Perhaps a more tallented executive could have replaced him sooner and/or a larger portion of his package could have been reworked a few years back to tie in with the stock’s performance. All of this is possible, but the Bush administration is working day and night to make sure our country’s top earners continue to receive more than they deserve.