JACKSONVILLE, Fla. – CSX Corp. shareholders have approved, on an advisory basis, the reimbursement arrangements sought in connection with the retention of E. Hunter Harrison as CEO, with at least 93 percent of the votes cast in favor. Furthe…
The 7%
The amount of money to reimburse directly or indirectly Harrison appears to be outrageous to everyday folks like me and most Americans.
The amount of money is approximately 2.8 percent of CSX’s 2016 operating cash. If Harrison is able to increase the company’s net operating cash flows by five percent – compounded - over the next five years, he will have generated an additional $861.7 million or $777.7 million after accounting for his compensation sweetener. If he is able to increase the operating cash flows by three percent, the impact would be $491.5 million or $407.5 million. Pretty good returns on an $84 million investment.
The settlement is not out of line with similar executive compensation packages. We can, of course, say that all executive compensation is out of line, but it is another argument.
I wonder how many poor working stiffs are going to be laid off to cover that amount. It’s enough to make a hard-core conservative like me wish Bernie Sanders was in the White House.
That’s capitalism, pal!!
You ain’t kiddin! The trouble is, capitalism’s a lousy system until you compare it with everything else. Kind of like democracy.
Remember a conservative commentator named James J. Kilpatrick? He said something in a column years ago (about corporate stupidity) that I never forgot:
“I’m a conservative, and a capitalist, and business has no bigger friend than me, but they make it awful hard for me sometimes.”
Hell with it. The local PBS station has a Luciano Pavarotti retrospective on. I’m going to spend some time with the Maestro, God rest his soul!
And for any of you kids out there… studying business and joining a railroad upon graduation might not be a bad career move. Oh, to be 20 again… that’s exactly what I’d do…
I did half of that.
But the wrong half.
Relatively few people have both college and hands on experience… it’s usually one or the other. There might be some opportunities there…
I just wish that more CEOs knew how to increase profits by actually growing the business instead of just cutting costs (and people).
The problem with that is summed up in the old adage “you have to spend money to make money.” All too many investors today only care about the making money part…
An old boss of mine excoriated Jack Welch (of GE) for just that.
“So he increased profits by laying people off, working those left three times as hard, and cutting costs to the point of recklessness. So what? Anyone can do that, that doen’t make him the genius everyone thinks he is.”
“The question I’d ask him is, ‘What did you do to grow the business?’”
The problem (as I see it [banghead] ): a lot of the Executive Types have poor memories…They tend to forget how hard they had to ‘work and produce’ to get to the executive suites. They tend to go for “the low hanging fruit”.
Slice and dice in the payroll, close plants, consolidate expenses. Strap on their golden parachutes, and then write a book, make a book tour, where they can beat their chests (like an old male silverback gorilla) shouting to all who will listen about how successful they were in business; while patting themselves on their back (side?). Then retire to a home on a Florida golf course. [:-^]
They leave the wreckage for someone else to figure out and salvage. [:-^]
The older I get the more cynical I get…Pavrotti sounds like something to unwind to. [{(-_-)}]
I worked at GE for 11 years. They cut 21,000 jobs in Canada in less t
s. Welch was not a visionary. Hell, anyone can cut costs. Harrison almost destroyed CP and he did not grow the business, he lost business. He cut staff, destroyed morale, alienated customers because of poor service and left a mess for his replacement. Good luck CSX…you’ll need it.
More than anything else Welsh focussed GE by putting resources behind those business that had a realistic chance of being number one or two in the world (like locomotives). Other businesses (like appliances) were shut down or sold off. He did what alot of other business leaders still need to do… too many businesses remain unfocussed, offering disparate products and services that contribute little or nothing to the bottom line but are responsible for a disproportionate part of the cost and productive capacity. Kinda reminds me of the door to door salesman who came to our house when I was a kid… he was selling shingles, tools, pudding, and motor oil… would have been better for him to concentrate on one of those I think…