NEW YORK – Last year, a year that began so brilliantly – for our top one percent – ended in angst.
Just one year ago, Forbes was predicting that 2011 might well turn into “the best year yet to be rich.” That prediction made sense. President Obama and GOP leaders in Congress had just cut an 11th-hour deal extending the Bush income tax cuts for America’s deepest pockets – and dropped the federal estate tax on the wealthy even lower than George W. had left it.
How our world has changed since then. Smug smiles no longer grace the faces of America’s rich and powerful. The Occupy Wall Street upsurge has Wall Street’s toughest CEO, Jamie Dimon of JPMorgan Chase, whining to reporters. That stuff about “everyone who is rich is bad,” said Dimon, “I just don’t get it.”
Obama gets it.
His Dec. 6 address at Osawatomie, Kansas resounded with the cadences of the Occupy movement. In broad and clear strokes, Obama described how “the breathtaking greed of a few” plunged us into crisis.
We personalize that greed with our fourth annual list of America’s 10 greediest. Last year, at this time, the greedy we chronicled seemed arrogantly triumphant. Now they just seem pathetic. The wheel has turned. In the year ahead, we all need to keep pushing.
One puts on football pageants. Another makes mega-millions on a virtual farm. They all remind us how much needs to change, economically and politically, in 2012 and beyond. The greediest among us in 2011 probably haven’t been any greedier, as a gang, than any greedy of the recent past. They just seem that way.
Who grabbed most greedily in 2011? We have no statistical yardstick to help us make that call. You don’t, after all, have to make a million to rate as an all-star greedster. You do have to be ruthless, self-absorbed, and grossly insensitive. That description fits far more folks than our ten dis-honorees. This week, we’ll give you the runners-up – numbers six through 10. Next week, we’ll give you the worst: The top (or bottom) five. Maybe next year, we’ll have a harder time filling out our top 10:
10.) Paul Hoolahan: Skimming the Sugar.
Greed has never been a stranger to pro or college sports. But this year’s most avaricious sports character works for a nonprofit. Meet Paul Hoolahan, chief exec at the Sugar Bowl, one of four annual college football postseason games that rotate hosting the national collegiate championship.
The Sugar Bowl enjoys tax-exempt status and regularly touts its contributions to good causes. Hoolahan’s favorite good cause may be his own. He took home just under $600,000 in 2009, the latest year with figures available, almost quadruple his $160,500 paycheck for the same job 13 years earlier.
Hoolahan and his two top aides are skimming off $1 of every $10 the Sugar Bowl generates, a Washington Post analysis recently noted. At the same time, adds the Arizona Republic, the Sugar Bowl and its three “Bowl Championship Series” partner bowls donate to charity only 20 cents from every $10 in revenue. That’s two percent, folks.
The Sugar Bowl disputes those figures. Hoolahan’s aides say their bowl never bothers to report many donations “as charitable giving.” This past September, one of those unreported “donations” came to light. The Sugar Bowl had spent, a Hoolahan flack had to acknowledge, at least $3,000 on political contributions to the governor of Louisiana, a nonprofit tax law no-no.
9.) Michael Duke: Shifting the Goalposts.
How do CEOs end up making so much? Ask Michael Duke, the chief exec at retail colossus Wal-Mart. Duke takes home his millions – $18.7 million in his company’s latest fiscal year alone – the old-fashioned way. He squeezes workers.
But sometimes squeezing just can’t get the job done. No big deal for Duke. He just moves the goal posts that determine his “pay for performance.”
Duke moved into Wal-Mart’s CEO suite in 2009. Since then, he ended “premium pay” for hours Wal-Mart’s employees worked on Sundays, eliminated profit-sharing, sheared health care benefits, and cut staffing so low, Retailing Today reports, that customers sometimes can’t find shopping carts because the store where they’re shopping has no employees available to collect carts from the parking lot.
This chronic understaffing may help explain why Wal-Mart’s “same-store sales” – the business “metric” that compares a retail chain’s sales at the same group of stores from one quarter to the next – started tumbling soon after Duke took over as CEO.
This same-store nose dive should have cost CEO Duke big time at pay time, since same-store sales, explains a New York Times analysis, accounted for 30 percent of the factors that Wal-Mart used to calculate Duke’s bonus.
But lo and behold, all of a sudden this past spring, Wal-Mart’s compensation committee eliminated same-store sales from Duke’s bonus calculations. The immediate result: Duke would receive $16 million in “performance” pay – despite Wal-Mart’s stunning same-store sales tailspin.
Duke’s total $18.7 million paycheck for the year would represent 750 times the annual pay of a Wal-Mart worker making $12 an hour, working 40 hours a week Some 75 percent of Wal-Mart workers make less than $12 an hour, notes a new report on Wal-Mart’s business model, and few Wal-Mart workers get 40 hours.
8.) Robert Iger: Impersonating Uncle Walt.
Imagine if you could live in “the happiest place on earth.” Even better, imagine you ran it! Then you’d be Robert Iger, the CEO of the Disney entertainment empire. Iger became Disney’s numero uno back in 2005, and this year has been one of his best. In January, Disney announced that Iger’s latest annual compensation topped $28 million, a neat 35 percent increase over the year before.
In October, Iger picked up a new pay deal that extends his contract into 2015 and adds on a cushy final year as Disney “executive chairman” – at $2.5 million – to help him make the transition into Fantasyland retirement.
Unfortunately, some housekeepers who work at the hotels in Disneyland have been raining on Bob Iger’s Disney parade. They went almost four years without a contract because they refused to accept Disney demands they feared would force them to pay hundreds of dollars a year extra for health care.
These spoilsport housekeepers testified earlier this year at a community forum that made poor Iger seem the reincarnation of Uncle Scrooge McDuck (or maybe just Scrooge). The original Walt Disney, the hotel workers union said, made 108 times what his housekeepers were making in 1966. Iger now makes 781 times as much.
Iger may now have to be content with a teeny bit less. Disney officials and hotel workers finally agreed on a new contract the first week in December.
7.) Doug Oberhelman: Threatening an Exit.
Lawmakers in Illinois, early in 2011, modestly raised their state’s corporate income tax rate to help fill a gaping state budget shortfall. That modest hike soon had the CEO at the Peoria-based Caterpillar strongly “suggesting” his Fortune 500 firm might have to exit the state. Mused Caterpillar chief exec Doug Oberhelman: “I have to do what’s right for Caterpillar.”
And maybe himself, too. In 2009, a year that saw only three U.S. corporations lay off more workers than Caterpillar, Oberhelman took home just under $3 million. His last year’s paycheck: $10.4 million.
Caterpillar workers, meanwhile, have a new six-year contract that, one news report notes, includes no raises and a big boost in health care premiums.
Cat exploits tax loopholes as systematically as employees. From 2004 to 2009, the company paid in Illinois income tax only 1.04 percent of its $30.4 billion in earnings.
6.) William Weldon: Seeing No Evil.
Contact lenses. Hip implants. Over-the-counter children’s medicines. You name it, Johnson & Johnson – the world’s second-largest health care products company – has recalled it over the past three years.
That’s one reason J&J sales failed to increase the past two years, for the first time since the Great Depression. Jobs at J&J fell, too. J&J has announced nearly 10,000 layoffs since 2004, despite $49.6 billion in profits the last three years alone.
Could any of this profiteering, job cutting, and chronic recalling be related? Absolutely not, says Johnson & Johnson CEO William Weldon. He declared last year that J&J had no “systemic problem.”
That may be right. Johnson & Johnson’s prime problem may be Weldon’s greed. In 2007, the CEO “restructured” the company and slashed J&J’s corporate quality control operation by 35 percent. The next two years, a hiring freeze made replacing newly vacant quality positions almost impossible.
These moves were soon paying big dividends – for Weldon. He took home $25.6 million in 2009. Then came the flood of recalls and assorted other scandals from kickbacks to illegal drug marketing. The Johnson & Johnson board response? The company dropped Weldon’s annual pay – to $23.2 million.
This summer, a special J&J board investigative panel cleared Weldon and his management buddies of any blame for the recalls. Explained the panel: “Senior management never issued any directives to the effect that quality should be sacrificed for production.” Weldon, Associated Press notes, also serves as chairman of the board and, as such, has nominated a host of J&J board members to their current positions.