Few Tears for Dennis Kozlowski; Million-Dollar Directors
from March/April 2008
I must say I am extremely disappointed with the January/February 2008 cover featuring Dennis Kozlowski, with the declarative headline “Why Giving Convicted Executives Decades in Prison Makes No Sense.” At the very least, the “Why” should be changed to “Does.”
In 2003 I was the CEO of McGrath RentCorp, probably the last company Tyco International [then headed by Kozlowski] acquired. Fortunately, the deal was not completed. In doing due diligence, I had an opportunity to view the sweetheart deals Tyco was making with the CEOs of the larger companies it acquired. Additionally, one could see how Tyco was taking expenses and shoving them back on these companies so that Tyco bore none of them and started with immediate profits.
You could do far more for corporate governance by posting yearly on your cover the mug shots of all these convicted CEOs, along with a countdown: “Three years served, 22 to go.”
Robert P. McGrath
Chairman, McGrath RentCorp
Livermore, California
White-collar crime is a violent crime. Among other things, it can hurt investors’ health, destroy their sense of self-respect, cause family stress, and make it impossible for them ever to buy gifts for their grandchildren.
Ken Kivenko
President, Kenmar
Toronto
Your cover story in the January/February issue was well done and appropriate.
Alan R. Weiler
Chairman, Archer-Meek-Weiler Agency
Columbus, Ohio
Million-dollar directors
“Companies That Pay Their Directors $1 Million a Year” (January/February 2008) incorrectly listed John Eggemeyer, chairman of First Community Bancorp, as receiving $6.6 million in compensation for his services as director of First Community. Quite the contrary: Mr. Eggemeyer’s retainer was $100,000 a year.
You also incorrectly characterized him as an independent chairman of the board. Mr. Eggemeyer is categorically not independent. Castle Creek Financial, in which Mr. Eggemeyer is one of several principals, provides investment banking advisory services to First Community and has received investment banking fees from First Community. It is inaccurate and highly misleading to assert that fees paid to Castle Creek Financial are the same as fees paid to Mr. Eggemeyer in his role as a director.
Robert A. Stine
Lead Independent Director
Matthew P. Wagner
CEO and Director,
First Community Bancorp
San Diego
First Community Bancorp’s proxy states that in addition to his $100,000 retainer, Eggemeyer was paid $6.5 million as “all other compensation.” A footnote says that most of that was paid to Castle Creek Financial for services rendered, but the company elected to show the whole sum as compensation paid to Eggemeyer. Corporate Board Member did wrongly identify Eggemeyer as an independent chairman and regrets the error.
The Corporate Library, the research firm that provided the data used in our story, erred in reporting that Duke Energy Carolinas paid director Michael E. J. Phelps $2 million in total compensation in 2006. That sum was part of a noncompete payment of $2 million (Canadian) to Phelps that the company included in his total compensation for 2004. Corporate Board Member regrets the error.
