Fros Business Week note similarity to AMZN:
On July 22, Computer Associates International Inc.'s shares sank nearly 31%,
to 39 1/2. Sure, the market was off that day. Yes, the company did warn that
earnings and sales growth would be adversely affected for several quarters
by the Asian meltdown. But really, the thrashing the stock took can be
attributed to one item in its first-quarter report: a $675 million aftertax charge
taken to pay three top executives, including Chairman and Chief Executive
Officer Charles B. Wang, $1.1 billion in stock. Before the charge, the
company earned $194.2 million; after the charge, it lost $480.8 million.
Even for Wall Street, the greedy excess was shocking. But what's more
remarkable is how this could happen--and with shareholder approval.
The pay package, which received a nod from 78% of voting shareholders in
their 1995 proxies, called for giving, not selling, CEO Wang, President Sanjay
Kumar, and Executive Vice-President Russell M. Artzt more than 20 million
shares if the company's stock closed above $53.33 for 60 days in a 12-month
period. Wang was handed more than 12 million shares, then worth $670
million, while his two subordinates got the remainder, worth $447 million. |
