Plum Puddings

December 25, 2006
      The latest staggering atrocity from the cloaca of business-and-finance as reported by AP at the end of last week:

     Pfizer Inc.'s former chief executive, Henry A. McKinnell, who was forced into early retirement in part because of investor anger about his rich retirement benefits, will get a retirement package totaling more than $180 million, a new regulatory filing shows.

McKinnell's package, which the company disclosed in a filing with the Securities and Exchange Commission on Thursday, included an estimated $82.3 million in pension benefits, $77.9 million in deferred compensation and cash and stock totaling more than $20.7 million.

     In other words, McKinnell was forced into early retirement with the very groaning cargo of swag that irate "investors" (i.e. shareholders) fired him for lining up for himself. His punishment is that he gets to enjoy the booty 19 months earlier than if he'd worked to the end of his contract.
     During McKinnell's tenure, 1999 to 2006, Pfizer's per share price went from roughly $50 to $30 (adjusted for stock splits). With about seven billion shares in existence, this reflects a loss in value for Pfizer of $140 billion under McKinnell's leadership.

      A board of directors exists to look after the interests of these shareholders. But gosh, what do you know -- a glance at the Pfizer board shows that the chairman was. . . Henry A. McKinnell!
    The Pfizer board of directors is made up of 15 members. It includes such luminaries as Ruth Simmons, president of Brown University; Stanley Ikenberry, former president of the University of Illinois; Nobel Prize winner (medicine) Michael S. Brown; Dennis A. Ausiello, former head of Massachusetts General Hospital; Constance Horner, former head of the US Civil Rights commission; Dana G. Mead, chairman of the board of directors of the company that runs the Massachusetts Institute of Technology. -- plus seven venal corporate hacks from the nation's business sector (not including McKinnell himself): M. Anthony Burns (Ryder Trucks); Robert Burt (FMC Chemicals); W. Don Cornwell (Granite Broadcasting and Avon Products); Jeffrey Kindler (Pfizer); George A. Lorch (Armstrong Floors); William C. Steere (Pfizer), and William Howell (JC Penny).

   Now, at some point, the Executive Compensation Committee of this board (composed of four directors) recommended McKinnell's pay package, including terms of severance, in case things didn't work out. Presumably, the committee then presented their recommendations to the full board for a vote. Aside from the massive clumps of deferred compensation ($77.9 million) and pension benefits ($82.3 million), the package included $12 million in pure severance pay, vested stock grants ($5.8 million), and a plain vanilla annual bonus of $2.15 million.

     It is amusing that a CEO who made $140 billion worth of stock value evaporate during his tenure would be regarded as worthy of a performance bonus. But the sweetest little sugar plums in the stocking are the $576,573 worth of medical and dental coverage (so Hank doesn't have to wait in some emergency room with a bunch of illegal Mexican sheet-rockers), and finally the $305,644 that McKinnell will get for paid vacation days he didn't take.

     What I'd like to know is how come Pfizer's directors are not sitting down right now with investigators from the Securities and Exchange commission, or the US Attorney's office, or the New York state Attorney General's office and answering some questions as to how they acquiesced in the looting of this corporation. Surely, there are only two ways that the directors' behavior can be explained: as either the wildest sort of fiduciary failure or flat out venality -- which would naturally lead to either civil trials or criminal prosecutions.

     The case of Ruth Simmons is especially interesting. The President of Brown University has been campaigning tirelessly for reparations for the descendants of American slaves. Perhaps before long she will meet up with somebody campaigning for reparations for Pfizer shareholders, and for American citizens who are charged unconscionable prices for pharmaceutical products.

      Somewhere in this nation, perhaps on a midwestern university campus, or toiling on the receiving dock of a Best Buy store, there are sharp young people who are not failing to notice the stupendous economic injustice that saturates the system as it is currently running. These young people may emerge as the Dantons, Robespierres, and Saint-Justs of the 21st century. It's not a happy prospect.

      Today, the New York Times reported that a new hyper-exclusive resort for the "ultra-rich" called Unlimited Speed is being developed in Georgia (where else?) featuring a private Nascar-quality race track where Goldman Sachs bonus boys and other such grandees can get their rocks off. They'd better fortify the place well. They'd better put a wall around it with an electrified fence and a death strip, because otherwise, sooner or later, if the regulatory authorities do not act, some very pissed off and energetic young Americans are going to steal into places like this and deal out some rough justice.
     Merry Christmas everybody.

Comments

[kd]

Merry Christmas, indeed.
Thanks for the fine post, Jim.
This is the "freedom" our troops are fighting for. This is the "freedom" tricksters like Milton Friedman (honored by the moniker 'Mr. Freedom' on the cover of a recent conservative, corporate-friendly magazine) paved the way for.

[dangerbird]

Ahh yes. Nothing like a little bite of hate pie, and possible threat of death by sansculotte and guillotine, on Christmas day.

Hey dip. I thought it was suburbia that our soldiers were fighting for. Ya' might want to get your story straight.

[kd]

If the "hate" you perceive here bothers you, feel free not to visit. Indeed, if you dislike Jim's posts so much (not to mention most of the comments), isn't it rather perverse of you to spend so much time here?

[liberals in bondage]

OOOooooooo. I like the French Revolution/"say goodnight Louie" backwash there towards the end.

[liberals in bondage]

James Brown, “The Hardest Working Man in Show Business”, is dead.

Now that is a shame. Rest in Peace, Godfather of Soul. Rest in Peace.

[dangerbird]

Don't let me stop you, bookboy. Belly up for another heaping helping of disdain stew. Have a couple slices of ham of hate. Put on a side of bitter potatoes, and drizzle on some wipetheJews-outberry sauce. And wash it all down with nice tall glass of quinine tea. Mmmm goood.
Happy festivus.

[michael]

FILE COMPLAINTS AT THE FOLLOWING SITES!

Securities and Exchange Commission: enforcement@sec.gov

New York Attorney General's office: http://www.oag.state.ny.us/complaints/html/comp_invest.html

Because her hypocrisy on the matter is particularly egregious, I also sent an email to Ruth Simmons, President of Brown University, advising her of my intention to file complaints. She can be reached here: president@brown.edu

[Evelyn]

In the interest of full disclosure, how much Pfizer stock do you own or control?

[bud4wiser]

Yes, the concept of the CORPORATION, itself is very scary indeed. Much of our culture has been formed by and continues to evolve as a product of these monsters known as CORPORATIONS.

Understand this, it's a "war" everyday between the various CORPORATIONS and the democratic process of our form of government.

And and near as I can tell, democracy has been losing for as long as I've been around.

To tie the subject matter of this turd-post back to Peak Oil, -- it will be interesting indeed to watch as the global oil corporations disturb any attempts to use democratic processes to form policy in distributing or conserving the last of the world's oil resources.

-----"let the little people burn wood" ------

[OlifromParis]

BRAVO...Great post as (almost) usual.

The same kind of insanities is taking place in France too. The guillotines have been well kept. Ready for duty. Might be one of our main exports in the very next future.

Merry Xmast from France.

[Tommy Jefferson]

So it's Milton Friedman's fault, not the people who purchased Pfizer stock?

True justice is truly free markets.

All voluntary. No state violence required.

[ryan costa]

it all seems pretty futile.

I wonder how history will look back on this. Where once we had so many southern intellectuals justifying the institution of slavery and later claiming the Civil War was over "States Rights", today we have the Thomas Friedmans, the Stephen Moores, the Alan Greenspans, and the Globalists and other Turbo Capitalists.

We have a president whose entire "private sector" career involved running companies into the ground before being bailed out by family friends and middle eastern royal families before parlaying that into co-owning a sports team bought with taxpayer dollars. And he unflinchingly stands up for the globalists and turbo-capitalists in the name of "free markets".

Yet somehow pharmaceutical companies and healthcare functioned much more effectively in this country before the mega-mergers of hospital systems and insurance companies and giant paychecks for their managers.

It is better to ask these questions now, while things aren't as critical. When these questions are asked after this point, the answers tend to be much more ineffective and drastic.

I recommend Ravi Batra's 3 books on trade and Alan Greenspan, his macroeconomics primer, Asphalt Nation, Turbo Capitalism, Coming Home to Eat by Gary Nabhan, Coming of Age by Studs Terkel, and Free Trade by Graham Dunkley.

[Dave]

The greed and corruption of these pirates are only exceeded by their unctuous self importance and self righteousness. Good post and a deserving one. The seedbed of Revolution is being watered every day and the storm to come will not be pretty or desirable but it will be inevitable. It will meet head on the dangerbirds with their fascists statist but the only problem is the proles in the services are in the process of revolt themselves so the dangerbirds will have to sub-contract it out !

[hooting]

"Who Rules America?" by G. William Domhoff, a classic now for many years:

Drawing from a power elite perspective and the latest empirical data, Domhoff’s classic text is an invaluable tool for teaching students about how power operates in U.S. society. Domhoff argues that the owners and top-level managers in large income-producing properties are far and away the dominant figures in the U.S. Their corporations, banks, and agribusinesses come together as a corporate community that dominates the federal government in Washington and their real estate, construction, and land development companies form growth coalitions that dominate most local governments. By providing empirical evidence for his argument, Domhoff encourages students to think critically about the power structure in American society and its implications for our democracy.

http://sociology.ucsc.edu/whorulesamerica/

[donna]

More of the same, Jim. Read _Pigs at the Trough_ by Arianna Huffington, get homicidal indeed:

http://www.amazon.com/Pigs-at-Trough-Arianna-Huffington/dp/1400047714

Yow! Get it for $.01 in hardback used at Amazon.com.

Happy holidays to all at CFN.

[Harry]

CFNians:

Sensational Solstice:

I'm taking a break, drinking my nog, and watching rain spatter against my window here in Richmond, Vee-A, where its been unseasonably warm --60s and 70s -- the past week and a half.

The immense greed Jim illustrates--actually, greed just cannot encompass such staggering acquistive, venal behaviors--how the U.S. is returning to the cycle of the Robber Barons of the late 19th and early 20th centuries. I recall a great scene from E.L. Doctorow's "Ragtime" wherein Henry Ford has convened all his plutocratic peers for a lecture on Egyptian reincarnation and here, the proto-"Lords of the Universe" are drunk, mumbling and passed out.

I'm reasonably certain this has gotten hashed out here during the years, but the entire concept and philosophy of what a "corporation" was supposed to do here in the USA has been hopelessly corrupted, really, ever since a man whom I otherwise find admirable for other reasons, U.S. Supreme Court Justice John Marshall, [Marshall was, I think of great interest to note, a line officer--not a Virignia gentleman general-- veteran of Valley Forge who experienced first hand how 13 squabbling states couldn’t keep the army supplied and, in his view, central control was needed. He therefore was a staunch Federalist who felt that corporations needed to turn into something else.]

He used the Constitution’s “obligation of contracts” clause to enforce that no state can pass laws impairing the obligation of contracts in any other state.

Marshall was, by the way, a cousin of Thomas Jefferson, our backwoods representative from the European Enlightenment, who knew his Rousseau, and it was Jefferson’s ideals—not his practical applications of them-- that so altered this country and set it to meet ideals we cannot possibly ever meet. Jefferson and Sir Walter Scott were also responsible for the Civil War, but that's another post for another board.Marshalll, by the way, saw it coming and part of the reason he didn't step down from the court--despite the urgings of family--was he that he wanted to help keep the nation and the Constitution together.

So on one end, there’s Marshall who sees concentration of power as a necessity for structure, and Jefferson, on the other, who thinks we should all be a yeoman subsistence farmer. Now, the latter is fine if your slaves till hundreds of acres of farmland (and, by the way, Jefferson died broke), and the former is good if you want the trains to run on time. In our world, the Jeffersonian example might be the Wikipedia, an open source, peer review online dictionary (whose credibility is sometime questioned, then again, Jefferson created his own version of the Bible).

And though he couldn’t have foreseen its awesome power, the Marshall paradigm, followed to the extreme, would be Microsoft.

[I have one more entry, then I'm shutting up]

[Harry]

Conclusion of previous entry:

The corporation, of the early 19th century, was created for the public good -- to build roads, organize assurance companies, construct canals.

The true weirdness started in the mid-19th century, along with plenty of other weirdness, during the era of the industrial tycoon. Corporations acquired the same rights as individual people. Let me repeat: corporations got the same rights as people.

This knotty development in the plot occurred with the 1886 Supreme Court case of "Santa Clara v. Southern Pacific Railroad." The Court used the 14th Amendment, designed to support freed African Americans, and their affirmed rights, as a way to protect, of all things, the corporation.

The Court—or in truth, a private clerk, writing an opinion-- classified the corporation, for legal terms, as a person.

This opinion disallowed California from taxing trans-state corporations. Worthwhile mentioning, that in 1938, Justice Hugo Black would say that a half century after "Santa Clara v. Southern Pacific Railroad," less than one percent—less than one percent—of Supreme Court rulings using the 14th Amendment did so to defend African Americans, and more than half quote, asked that its benefits be extended to corporations, unquote.

Thus, the United States corporations, which are staggering in their enormous power, are treated legally just the same as you or me.

Problem with corporations receiving the same legal protection as individuals is that if corporations are people, then
some of them—some of them-- are freaking sociopaths.

I mean, they can be charming and even good-looking, but, girls, do not hitch a ride alone with them in their car. They remind me of those tasteful, intelligent murderers in Hitchcock’s film "Rope."

It’s justifiable homicide to murder somebody if they aren’t up to your standards and if you can profit by their oppression or demise (fiscally, or even, in some cases, physically)

Corporations abstract real people, like us, in the same way Simone de Beauvoir talks about the objectification of the Second Sex. This objectification is justified in the name of profits and the ruthless free reign of the market place. Corporate leaders see—are trained to see-- the market as a zero sum game.

Go watch your "Third Man" and the Ferris Wheel speech and that's about how it works. The criminal Harry Lime philosophizes, "Nobody thinks in terms of human beings. Governments don't. Why should we? They talk about the people and the proletariat, I talk about the suckers and the mugs - it's the same thing. They have their five-year plans, so have I."

Remember Enron's executives laughing about freezing grandmothers in California?

We might speculate about Robspierre or a St. Just arising, but I doubt it. Everybody wants to be rich, and wants to lord it over everybody else. Which is why the likelihood of a "revolution" occurring here is minimal. Besides, revolutions are very messy. And we have a democratic elecion process. Don't we? Hello? Is this thing on?

Happy holly-daze.--HEK

[ross]

With respect to JHK's diatribe against another one of America's growing number of rich and infamous, I think it's appropriate to recommend Chalmers Johnson's (unofficial) National Intelligence Estimate on the United States which is published in the latest edition of Harper's.

Here's just a small sampling:

Key Judgements:

"The United States remains, for the moment, the most powerful nation in history, but it faces a violent contradiction between its long republican tradition and its more recent imperial ambitions.

The fate of previous democratic empires suggests that such a conflict is unsustainable and will be resolved in one of two ways. Rome attempted to keep its empire and lost its democracy. Britain chose to remain democratic and in the process
let go its empire. Intentionally or not, the people of the Unites States already are well embarked upon the course of non-democratic empire.

Several factors, however, indicate that this course will be a brief one, which most likely will end in economic and political collapse."

[dangerbird]

My last contribution to this here hot dog stand was on Saturday 7:07.
The posts that have appeared in the interim attributed to me, most likely constitute nothing more than "chicken Jack"'s echo chamber ringing in his head which then found its full expression in the form of conversations with himself. Under the guise of a legitimate set of utterances by this sometimes commentor.

[dangerbird]

Why don't you people just confess to being bitter socialists who resent all who have done better in their lives? There is no other reason for your resentment.

[quickwood]

Great post Jim. Have just passed on to many more. We need to keep focused on getting these stories out there. I am finding that many of my suburban republican neighbors are jumping ship or are on the edge of doing so. There is an inherent believe that America is a fair and just place; it takes lots of on point stories to help wake people up and arouse their indignation. Many of my Republican friends either voted democratic or did not vote last election. Two of my neighbors who have been lifelong republicans have switched registrations. I believe this trend will continue here in Philly's suburbs. Yes, I know the Dem's are often not much better, but we can get them to move on important issues and incrementally move things in a better direction. The conservatives after all have been working relentlessly on this "New Royalty" or "New Pharisee" thing for the better part of 30 years. We need to work on storytelling narratives that make these issues clearer to the people.

[Fee Fee Le Fem]

le bird,

same old, same old. no different then the "liberally" minded collegiate sots that shout down every guest speaker to apear on campus who isn't wearing a "Che" t-shirt and carrying a copy of mao's little red book. a very open minded lot one and all. funny thing is there are only about 5 or 6 that actually post here. excluding their multiple personalities. you gotta admit though it is kind of funny. in the same way that steve martin's last 10 movies are funny.

[Fee Fee Le Fem]

like...wow...man. jerry rubin is still...like...into peace...man. hey bird...like..ahh...we should go see this dude. i'll pick you up. wouldn't want to miss out on this...man.

1970s peace activist Jerry Rubin still fighting war
Now in his 60s, protester says he's fueled by sense of 'responsibility' to improve the planet

http://www.thestate.com/mld/thestate/news/world/16306171.htm

[Typepad User]

Reminder: dangerbird/oeo/fee fee

are all ze same fucktard troll.

[Katherine]

Mr. Kunstler,

Thank you for this, for your Web Site, for your books, for your research and thought.