Monday, April 09, 2007

Unions take on Executive Pay

I saw this article from yesterday's Financial Times that the AFL-CIO is taking on Ivan Seidenberg, Verizon's CEO, over executive pay:

The AFL-CIO, the largest US trade union federation, is to make Ivan Seidenberg, Verizon Communications’ chief executive, the “poster child” for its campaign against excessive executive pay after previously targeting the chief executives of Pfizer and Home Depot.

Richard Trumka, the AFL-CIO’s secretary-treasurer, noted that Mr Seidenberg had earned more than $109m in the past five years, despite negative total shareholder returns during the same period of about 5 per cent.


The AFL-CIO’s decision last year to mount what it described as a “successful campaign” against Pfizer and Home Depot helped fuel growing investor concern about performance of chief executives and their severance packages.


Finally! All of the people who argue that unions aren't relevant anymore don't understand the big picture: it's not just about worker pay, it's about the overall health of the company. If the company can't sustain its workers long term, how much the trench-workers make is irrelevant.

I don't believe Berney Ebbers would have been able to pull off that debacle at Worldcomm if it had been a union shop. It doesn't hurt to have another set of eyes from an interested party watching the books, especially since their Board of Directors were asleep at the wheel. Ebbers used mergers and acquisitions to hide his indiscretions, and unions go over everything with a fine tooth comb before they sign of on any m&a deals.

Just my opinion, but I know I'm right.

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