Tuesday, April 21, 2009

Cat CEO Makes $17.7 Million in 2008

While many stockholders saw the value of their Cat stock drop up to 60%.

Maybe name the new riverfront center The Jim Owens Caterpillar Visitors Center that will be built with stockholder dollars, if it's built. The JS should print what the other Cat executives made in 2008 compared to 2009. Also the Cat board members.

The Tea Party people got it 2/3 rds right. The other 1/3 lies in the greedy executives and board members in the private sector. Suggested reading, "House of Cards, A Tale of Hubris and Wretched Excess on Wall Street", by William D. Cohan.

Of course, not to be overlooked is the recent Owens Family donation of $1 million to OSF and up to $1 million to the PRM. Actually, partially stockholders money.

Hope I'm around to comment on his 2009 income. No change, I'll wager, if he brings Cat stock up to $50 which would still be $35 below where some stockholder bought it..

Wonder how much of the Cat stockholders money was part of the $640,000 the PRM Committee spent to "sell" this (not fully understood project by the ordinary taxpayer) riverfront development.

More on this project as it becomes more transparent that this museum will be more than 65% funded by the taxpayer. Someone challenge me on this figure. The $14 million or more of stimulus money just promised (sought) doesn't fall from trees. That's in addition to the $14 million from the city, taxpayer dollars, and the $4 million already secured by Ray LaHood in 2007 as a Highway Bill Earmark. Remember? And the $6 million already secured from other state and federal sources. Nor the $1,250,000 in stimulus earmarks being sought by Rep. Schock. No, sorry, Virginia, it comes from taxpayers, many who can not afford it. Promoters like LaHood and Schock can afford it. Being high level politicians, they are set for life.

Sorry I haven't blogged much lately. Not too much good news and a reminder today by the JS that the entire cities (possibly your) obligation, and absolutely your risk, on the new Pere Hotel expansion is $81 million counting interest, until 2032. Thanks, John Sharp, for printing more of the "whole story".

It was never acknowledged by the "$640,000 RFM Committee" that the "small" two-bit sales tax will actually add up to as high as $72 plus over 20 years.

If all the spending and planning don't turnout as promised, so what? It will be built, just like the RiverPlex and ballpark. The drivers will all point to their accomplishments despite the fact that these like most other "downtown type" developments, haven't yet lived up to their projections.


Anonymous said...

Hey, Merle--

Just a couple questions...
1. Did you know Jim Owens owns more shares of Cat stock than virtually 99.9% of individual investors? I'm assuming his investment went down 60%, just like everyone else.
2. What was your average "salary" as owner of your office-equipment business? How much did you give back to employees in years when sales are off? How much did you pay annually for employee healthcare and bonuses...or pensions?
3. Any idea what CEOs of other Fortune 100 companies make? Owens' salary isn't anywhere near the top.

Anonymous said...

$7,461,724 of Owens' total compensation was in the form of "Stock Appreciation Rights" based on a grant price of $73.20 per share, the closing price on March 3, 2008.

$1,068,724 was in stock awards at $75.29 share price (today's value: $460,563).

$2,932,489 was accounting for "Change in Pension Value and Nonqualified Deferred Compensation Earnings".

If you add up Owens' direct, cash compensation this year it is: $1,550,004 Base Salary + $4,353,227 Non-equity Incentive Plan Compensation + $288,369 Other Compensation for a total of: $6,191,600. Of which he gave away $1,000,000.

No doubt Owens lives very comfortably, but in light of CAT's 2008 and prior years' performance and comparison to other company's CEOs, I don't see anything about which to get upset.

Merle Widmer said...

Glad you asked. My average salary over 28 years was around $55,000 a year. More than one salesman made more than I did but I was building a company that had value and could be sold later. I put earnings back into the business instead of paying my self a lavish salary. I retired with no pension. Sorry folks, you are on the wrong track. I owned one hundred percent of my company and signed personally for every dollar I ever borrowed.

No executive working at Cat now has ever had to sign personally for Cat borrowing which now is huge.

When I sold my company in 1992, the company had a Finacial D & B rating of 3A1, the highest rating a $11 million dollar company could get. Caterpillar's rating is under review by Moody's as I write and their payment of future dividends are under review by their board.

I never laid or fired because business was bad. I fired when they didn't fit the goals we were attempting and eventually acheived.

What did I give back to my employees when business was bad? The right to stay employed.
Owens has laid off or fired 25,000 with more to come on June.

As to our health care plan, all employees were on the same plan as I was. When we had a pension plan, the employeed plan was the same plan as I had. Did I pay bonuses? Yes, small but all we could afford. I wasn't a 2nd or 3rd generation inheriter and I wasn't born holding a silver spoon. The local banks were aware I started my business with only $5,000 borrowed on my life insurance.

While Caterpillar stockholders are taking a bath, Cat is going to build an unneeded (by their own admission) visitors center and strongly supporting a so far under financed museum with taxpayers and with stockholder dollars which a majority of the people (I didn't say "voters" in Peoria County) living in the area believe will be a financial drag on the community for years to come. Spend $640,000 to convince people to vote yes? Come on.

Like sports names, celebrity names, executives such as at Caterpillar and on Wall Street by the hundreds of thousands are overpaid, under current conditions, including Mr. Owens who still has his base salary, a growing pension plan, paid insurance, company paid perks by the dozens and an exit "parachute" package that most people could live on for 5 lifetimes.

Regardless of how Owens got to $17.7 million, that's what he took home in 2008 minus deductions. All the money he had already made in his career at Cat promises he won't have to worry about losing his home or sending his kids anywhere he wants to send them.

Sure, even I made money on buying and selling Cat stock but when you are paying these executives to run the comapany, I suspect they should have used better foresight and kept thir stockholders better informed. One insider told me they planned to split when they reached $80 in 2007 or 2008. They reached as high as $85 but they never split.

I plan to live to see what evolves.

And yes I know what the words "exercise" and "gift" means to insiders.