Why aren't there more stories like this?
Citing the tough times at their company, the chairman and president of Charles Schwab Corp. passed up bonuses last year and gave back the stock options they'd been awarded for the past three years, the company reported in a recent filing with the Securities and Exchange Commission.
According to the man-bites-dog definition of news, this executive decision is noteworthy because it's the opposite of what so many top executives are doing -- safeguarding their pay, and sometimes engineering fat raises, even as their companies' share prices fall.
At Sprint Corp., for example, the chairman's salary and bonus package jumped by 57 percent last year, while the president's package rose 48 percent. Both men have recently been asked to leave the company in a controversy over their involvement in a questionable tax shelter. Sprint shares fell by 82 percent in 2002.
Right now, the war in Iraq is obviously the biggest factor in the financial markets. But there's still unfinished business here at home. Among the most serious issues is investors' well-founded belief that many companies are being run for the benefit of insiders rather than shareholders.
A recent study of 178 major companies by Hewitt Associates, the corporate consulting firm, found the median firm planned to give top executives merit raises of 3.5 percent this year.
Many shareholders would be for a guarantee of gains that big, given the monumental losses of the previous three years. But ordinary folk have to take their chances.
If you own shares of stock, you have received, or soon will receive, a proxy statement for this year's annual meeting. Deep inside you'll find a report on the compensation for your company's top executives and a rationale for their raises or pay cuts.
The top folks are getting raises, even though share values have fallen?
And here's why
There's a good reason for that, the typical statement reports: These guys are doing a great shop shepherding their firms through tough times.
Translation: They've fired a lot of employees, tightened spending and exacted a lot of other sacrifices from the rank and file -- sacrifices they're not making themselves.
Granted, anyone who's done good work in bad times deserves recognition, and perhaps reward. But if the overstressed employees at cut-back companies aren't getting raises, their bosses shouldn't, either.
At too many companies, chief executives and other top dogs win no matter what. They made fortunes in the '90s -- not by doing great work but by merely riding the coattails of the soaring stock market. In fairness, they should have suffered pay cuts to reflect the stock price declines of the 21st Century.
But as stocks fell, many corporate boards' compensation committees ladeled out raises, bonuses or larger stock option grants to soften the blow for the coddled executives.
But continuing evidence of executive greed has another, more important, byproduct: It undermines faith in the stock market.
Are scandals over?
Six months ago, many of us started to believe that the big Enron-type scandals were behind us.
But just last month, securities regulators announced that WorldCom Inc. had inflated profits by more than $9 billion.
Controversy, accounting scandals, executive greed: It's business as usual in Corporate America.
"What really gets the public is when CEOs get very rich and stay very rich, and get very poor," Berkshire Hathaway CEO Warren E. Buffett said in a recent speech to chief executives.
"It is vital that we earn back the trust of the American public. We will get it back when we deserve it."
That point will come a little sooner if more companies follow Charles Schwab's example .
XJeff Brown is a business columnist for The Philadelphia Inquirer. E-mail him at email@example.com.