Puck: Right you are! This has to be one of the best pragmatic reasons for owning dox. For those that haven't seen, I pasted the Tribune article below
Ken G
SBC'S EXECS' TIES TO VENDOR CRITICIZED
Chicago Tribune
April 16, 1999
Top executives of SBC Communications Inc. have a personal financial interest
in an SBC vendor that is a serious conflict of interest, providing another
reason why SBC's takeover of Ameritech Corp. will harm consumers here,
Citizen Action Illinois said Thursday.
SBC's top five executives received more than $20 million in stock in Amdocs
Ltd. as part of their compensation last year from SBC, said David Stahr,
research director for Citizen Action, an Illinois consumer group. SBC Chief
Executive Edward Whitacre Jr. got $12.6 million worth of Amdocs stock, which
was half of the $23 million in compensation he received last year.
SBC is Amdocs' biggest customer, supplying about 20 percent of its business,
which includes customer billing, collections, revenue management and
directory services, said Stahr. SBC owns about 20 percent of Amdocs, which
began 15 years ago as a start-up company in St. Louis. It has since grown
into a global company.
"It's extremely unusual for a company to compensate its executives with
stock from another company," said Stahr. "In 20 years of doing corporate
research, I've never seen it before. It creates a conflict. These executives
have a stake in seeing Amdocs prosper. They may pay more to Amdocs than to
other vendors, and they may export jobs to Amdocs.
"If they are allowed to take over Ameritech, we fear they will take services
now being provided in Illinois and ship them to Amdocs."
While it is true that SBC awarded Amdocs stock to its executives and does a
lot of business with Amdocs, there is nothing sinister in the relationship
and no reason to fear it will cost anyone his job, said Selim Bingol, an SBC
spokesman.
"When Amdocs started as a private firm in the 1980s, we invested $25 million
and had a 50 percent interest," said Bingol. "Today that investment is worth
more than $1 billion."
Amdocs was started to develop software SBC needed, a skill the former
Southwestern Bell didn't have in-house. At the time, both companies were
based in St. Louis.
SBC elected to award its top executives with Amdocs stock, Bingol said, in
recognition of the value of the Amdocs investment decision and also to
retain those executives.
"It's very much in the interest of SBC shareowners for Amdocs to continue to
do well and for key executives to stay with SBC through creative programs
like this," he said. "There is no conflict."
Bingol scoffed at the notion that SBC's close relationship with Amdocs could
threaten jobs in Illinois or elsewhere.
"Our merger with Ameritech has strong support of many unions," he said. "Our
track record is one of building jobs. We've created 7,000 new jobs in the
past two years company-wide. These people are grasping at straws in their
efforts to block our merger."
Stahr said that his group hopes to raise the Amdocs connection at public
hearings on the merger set by the Illinois Commerce Commission for the end
of this month. He said he also is talking with the Texas consumer advocate
to determine if the unusual SBC/Amdocs relationship is of interest to other
regulatory agencies. SBC is headquartered in San Antonio. |
