Monday, April 17, 2006

The Way of Business: The CEOs Get Richer While Minimum Wage Stays the Same

'Tis the season when publicly traded companies hold their annual meetings. So, in my Yahoo email account I receive notices from the few companies we own that it's time to vote my shares in preparation of the shareholder's meeting. I employ the same ethic to voting for boards of directors and shareholder proposals as I do for voting for candidates, which means I spend more time than I should researching who the various board members are and what the shareholder proposals mean.

(Before you jump to the conclusion that college professors get paid too much if I have money to play the stock market, let me be clear: the play money came from a lovely and lucky windfall my husband and I received for being in the right place at the right time in the real estate market in Philadelphia. That whole buy low, sell high moto works.)

Here's what I learned from my research this weekend: If you want to be rich, become a CEO.

Of the companies I researched this weekend, only one CEO made less than $1 million in total compensation in 2005, and that was Charles Schwab, the namesake and CEO of the financial company. He made $911,000 in compensation. And that figure was so low becuase he refused the bonus that his Board of Directors Compensation Committee had allocated for him. His peers in the same market sector made on average $4.7 million in 2005.

By contrast, the CEO who made the most money of CEOs in my portfolio was the Chair and Executive of a mega-conglomerate called Cendant. Henry R. Silverman raked in $24 million last year. (Cendant is a company that owns everything for Coldwell Banker to Orbitz, to Cheaptickets, to Wyndham, to Budget. It's breaking into four companies over the next few years.)

Now, you might think that perhaps that's just what CEOs of companies of his type make. No. The average compensation is $3 million.

Well, maybe you'd think that he must really deserve it. This must be a company that's stock is soring, that is gaining ground in its many business ventures, that is outcompeting its competition. No.

Of all the stock I own, it's the one of two companies that's sucking ass. I've lost 26% of my money on the company since I bought into it over a year ago.

So, why does this guy deserve to make 800% more than his rivals? Beats me. It's counterintuitive that somebody who is the CEO of a conglomerate can make money while the company is losing it.

What's really aggravating is there isn't much I or any of the shareholders can do about it. Executive compensation is generally not voted on by shareholders but is decided by a sub-committee of board members who chair a compensation committee.

Here's the rub: All those &$*%ers are CEOs themselves. So, it's a beautiful club to join. I join your Board of Directors and give you a nice fat salary, bonuses, and stock options. In return you join my Board and do the same for me.

Meanwhile, the federal Minimum Wage of $5.15 hasn't increased in 9 years, and the rising costs of fuel, food, and life's essentials have increased more than the 2% cost of living raises the rest of us working schmucks get per year.

Where's the justice?

Thursday, April 13, 2006

Higher Education, Salary Gaps, and Manliness

I've been working for two years now to improve the family/maternity leave policy at the University at Albany. During this time, I have grown keenly interested in gender disparities in higher education.

Inside Higher Ed is reporting this morning a new study that looks at the salary gap between male and female academics. In raw numbers, female professors on average earn 21.8% less than their male counterparts. The researcher, Paul D. Umbach, then identified several independent variables, including number of years in the discipline, number and types of publications, whether the faculty has external grants, and rank.

Factoring in all these variables reduces the gap to 6.8%. That's still a sizable number in my mind, although not nearly as grim as a full 20%.

Umbach isn't sure that the gap indicates a genuine bias towards giving men higher salaries or if the bias is more discipline based - some disciplines are populated with more female faculty (schools of social welfare/social work, schools of education) and others with more male faculty (engineering, computer science, biology, chemistry).

I'm not sure that there's a "preferrence" in salary allocation to male faculty either, but I am sure there are system wide biases. There are clear salary discrepencies between, for example the hard sciences and the humanities, with hard science faculty making more than arts faculty, and hard science faculty bringing in more external funding.

To me, this just indicates that our society, for better or worse, places more value on "hard" sciences than on humanities. And, with more women attracted to the humanities than the sciences, and women's work less valued than men's, we get further reinforcement of the justness of the salary discrepancies.

Speaking of women's work less valued than men's, I heard an interview on WBUR Boston's "On Point" with Harvey Mansfield, who has written a new book, Manliness.

He defines "manliness" as "confidence in a situation of risk," and argues that this is a quality that men have and that women lack (tell that to Rosa Parks, Elizabeth Cady Stanton, Madeline Albright, Ida Tarbell, Margaret Thatcher, and any number of women who have stood strong in the face of adversity and danger).

He argues that we need more "take charge" guys; that our gender-equal society has constructed women and men as interchangeable. This is bad for our society, since women are inherently NOT interchangeable with men.

Women are inferior to men. Yes. That's what he said in the interview.

And certain jobs women do are sheer drudgery for men, like housework, and should be done with pride by women, but should not be done by men, since it's beneath men to do.

I would not want to be Mrs. Mansfield.

Saturday, April 08, 2006

South Dakota Senator Bill Napoli is Looney

As I hope everyone knows by now, South Dakota's government recently passed a law banning all abortion except if the mother's life is threatened. They are hoping that the law will be challenged eventually at the level of the Supreme Court and that Roe V. Wade will be overturned.

My cousin Loy and her partner Bob live in South Dakota, and Bob has created an auction site on E-Bay to raise money for a proposed women's clinic on the Pine Ridge Reservation. It's an interesting way to ensure women have access to basic medical services, including abortion, even if the ban takes effect--since Pine Ridge isn't subject to state laws. Even if the ban never takes effect, South Dakota currently only has 1 abortion provider in the entire state located in Sioux Falls, which is on the eastern end of the state and a five hour + drive from the western end of the state. More clinics in South Dakota are desparately needed.

The item being auctioned by Bob to raise money for the clinic is a card with a statement by one of the South Dakota Senators, a truely remarkable character, by the name of Bill Napoli. Napoli on the News Hour with Jim Lehrer justified that there shouldn't be an exception in the bill for rape and incest, because such an exception would naturally occur for a particular type of rape victim:

"A real-life description to me would be a rape victim, brutally raped, savaged. The girl was a virgin. She was religious. She planned on saving her virginity until she was married. She was brutalized and raped, sodomized as bad as you can possibly make it, and is impregnated. I mean, that girl could be so messed up, physically and psychologically, that carrying that child could very well threaten her life."
Bob, who has a mischievious wit, has created a card printed with this bizarre declaration, which Bob has titled the "Sodomized Religious Virgin Exception" that he's auctioning on e-bay to raise money for the Oglala Women's Clinic.

Here's where things get very strange.

Bob mailed a copy of the card he's auctioning to Napoli. Napoli sent him a note back that made my jaw drop. You can see a copy of it, but the text reads as follows:

Newland,

What's with the Bullshit Card? You want to be friends again????

After reading some of your diatribe on a couple of the blog sites, I now understand you much better.

Your apparent self importance isn't near what you think it is. As a matter of fact, for a person who has failed so miserably in his life, I am surprised at your consistent criticisms of people who used to have a modicum of respect for you.

I suppose too many years of seld induced abuse has definitely taken its' [sic] toll.

No Joke Newland! If I could have had you arrested for the threat you made towards me and my family, I would have.

Napoli.
The blog comments and the "threat" that Napoli refers to was a comment Bob wrote on the Rapid City Journal Blog that said
When Napoli's father was growing up here in the wild west, his cafe was burned to the ground. A sign was left nearby, 'Italian nigger go home.' I happen to believe that can happen again. Ah, the good ol days.
The moderator of the blog wrote a note following Bob's comment with this:
I got a backchannel complaint from a reader who said someone could take the above comment as a threat or intended threat. It didn't seem like a threat to me, but I called Newland and asked him to clarify the remark. Bob told me his "ah the good old days" comment was in reference to Bill N's statement that he believe [sic] we could go back to the days when young men were forced to marry the girls they impregnated and live up to their responsibilities.": "I was mocking his comments about shotgun weddings," Bob told me. he said his point was that the "good old days" might not have been so good. Bob also said, "I think Napoli's been a valuable asset to South Dakota."
As a friend of Bob's, I can also say confidently that Bob's comment was not intended in any way to be a threat to Napoli.

Nonetheless, Napoli's pissed at Bob. So, Napoli contacts the South Dakota Criminal Investigation unit and has an agent sent to Bob's house to interrogate him about the supposed threat. Bob wasn't arrested, since there was no threat there, but Napoli certainly was doing his best to threaten Bob.

So much for free speech in this country--especially speech targeted at a looney South Dakota Senator who is so self-important as to think he can treat women like vessels and dissenters as criminals.