| Many chief executives pursue the four Ps - | | | | takes the company bus to his stores.Indeed |
| pay, power, perks and prestige rather | | | | examples of executive abuses dominated the |
| | | | news during 2002. Many Enron |
| than profits for the company.Recently, there | | | | |
| are more and more CEOs falling from grace. In | | | | employees were fired whilst Senior |
| the United States, forced | | | | Executives used $200,000 to fund its luxury |
| | | | box at |
| exits accounted for 39% of CEO departures in | | | | |
| 2002 up from 25 % in 2001, according to | | | | the formerly named Enron Field. Though |
| | | | founded on the innovative idea of instant |
| Booz Allen Hamilton. In 2002, Enron Chairman | | | | |
| Ken Lay, Tyco chief Dennis | | | | photography, Polaroid's management failed to |
| | | | save the company from the shift to digital |
| Kozlowski, Qwest's Joe Nacchio, Worldcom's | | | | |
| Bernie Ebbers. Year 2003 saw the | | | | cameras. Polaroid reportedly cancelled |
| | | | health-care benefits for the company's |
| departure of CEOs from Raytheon, Kmart, | | | | retirees in |
| Spiegel, Scherling Plough, Motorola, Freddie | | | | |
| | | | the wake of its Chapter 11 filing. However, |
| Mac, Boeing, American, etc.Agence | | | | management reportedly petitioned the |
| France-Presse (AFP) in 13 April 2004 reported | | | | |
| that Professor David Yermack of | | | | bankruptcy court for permission to dole out |
| | | | roughly $19 million in bonuses to keep key |
| New York University Stern School of Business | | | | |
| found that the average shareholder gains | | | | executives from leaving. Webvan is another |
| | | | example. It failed to compete against the |
| underperformed market benchmarks at | | | | |
| companies where the chief flies by luxurious | | | | traditional supermarkets with its online |
| | | | shopping services and home delivery. Before |
| corporate jets. In the study, "Flights of | | | | it |
| Fancy: Corporate Jets, CEO Perquisites and | | | | |
| | | | ceased operations, the company reportedly |
| Inferior Shareholder Returns", Professor | | | | agreed to pay its resigning CEO, George |
| Yermack said: "The central result of this | | | | |
| study | | | | Shaheen, $375,000 per year for life although |
| | | | the Webvan's stock price plunged 99 |
| is that CEO's personal use of company | | | | |
| aircraft is associated with severe and | | | | percent during his tenure.Kmart in |
| significant | | | | bankruptcy authorised payments of $362,000 |
| | | | per month in retirement benefits |
| under-performance of their employers' | | | | |
| stock....Firms' stock prices drop an average | | | | to some 242 of its executives. The Kmart's |
| of 2 | | | | creditors which K mart owed $6 billion |
| | | | |
| percent around the date of initial | | | | protested to a Chicago bankruptcy judge.L A |
| disclosure of corporate plane use."Some of | | | | Times writer John Balzar observed that |
| the CEOs may not be justifiably fired as the | | | | creditors and shareholders are not the only |
| economy turns bad through no | | | | |
| | | | ones enraged at the seemingly arrogant |
| faults of theirs' but they were held | | | | attitudes of America's corporate giants. |
| accountable. However, the days of fat cats | | | | |
| running | | | | "Consumers are mad, and some are declaring |
| | | | petty war against the mighty corporation, |
| corporations are over.Uncontrolled and | | | | |
| unnecessary costs destroy businesses. If your | | | | against shenanigans, the double-dealing, the |
| competitor has a limo and | | | | get-rich-quick schemes, the fraud, the |
| | | | selfserving |
| you do not, you are already winning. He has | | | | |
| a leaky bucket. There are six self-made | | | | deals." Those investors felt that they have |
| | | | been robbed as they saw their |
| multi-billionaires. And all of them were | | | | |
| paragons of simplicity and prudence in | | | | retirement savings dwindled.In America, CEOs |
| self-aggrandisement.In 1991, Sam Walton | | | | compensation surged 1000% in three decades, |
| founder of Wal-Mart drove an eight-year-old | | | | making it to 500 times |
| red Ford pickup. He | | | | |
| | | | the pay of the average worker. Yet, they are |
| always fetched his own coffee. As President | | | | greedy for more. Martha Stewart of the |
| of EDS, Ross Perot paid himself $70,000 a | | | | |
| | | | ImClone System expensed off the US 17,000 |
| year. However, when Perot sold EDS to | | | | cost of a holiday to her company. Dennis |
| General Motors, the President of General | | | | |
| | | | Kozlowski spent US$15,000 on a "dog umbrella |
| Motors, Perot's new boss, made $2.4 million | | | | stand" and US$6000 on shower curtain. |
| salary plus a bonus. Finally, he paid Perot | | | | |
| | | | John Rigas spent US $20,000 of Adelphia's |
| $2.5 billion to go away because GM | | | | shareholders' funds on a Christmas tree. The |
| executives were embarrassed by the folksy | | | | |
| Perot, | | | | list of corporate excesses goes on and |
| | | | on.CEOs who live "fat cat" lifestyles using |
| who did not demand a fat salary or swanky | | | | corporate funds should be slaughtered and |
| office or specially tuned cars. David Packard | | | | |
| | | | skinned. Mike Teng (DBA, MBA, BEng, FIMechE, |
| | | | FIEE, CEng, PEng, FCMI, FCIM, SMCS) is the |
| never had an enclosed office before he left | | | | author of the best-selling business book |
| Hewlett-Packard for government service. Bill | | | | "Corporate Turnaround: Nursing a sick company |
| | | | back to health", in 2002. In 2006, he |
| Gates of Microsoft often rode coach on | | | | authored another book entitled, "Corporate |
| planes, until they finally got so big they | | | | Wellness: 101 Principles in Turnaround and |
| ran their | | | | Transformation." Dr Teng is widely recognized |
| | | | as a turnaround CEO in Asia by the news |
| own fleet of aircraft. Warren Buffet manages | | | | media. He has 27 years of experience in |
| Berkshire Hathaway's billions and billions | | | | corporate responsibilities in the Asia |
| | | | Pacific region. Of these, he held Chief |
| with a staff of 24. When they lunch | | | | Executive Officer's positions for 17 years in |
| together, it is McDonald's. Warren still | | | | multi-national, local and publicly listed |
| stayed in the | | | | companies. He led in the successful |
| | | | turnaround of several troubled companies. He |
| same house that he bought thirty years ago | | | | is currently the Managing Director of a |
| and drew on a salary of US 100,000 per | | | | business advisory firm, Corporate Turnaround |
| | | | Centre Pte Ltd, which assists companies on a |
| annum. Ingvar Kamprad, the founder of Ikea | | | | fast track to financial performance. |