WALL STREET-INSPIRED THOUGHTS ON GRASSO, GOLF, AND GREED
by Mark Scheinbaum
American Reporter Correspondent
Boca Raton, Fla.
BOCA RATON, FLA. (Sept. 22, 2003)-Since the (Dick) Grasso is always greener on the other side of Wall Street, I am now required to enumerate some disjointed thoughts on folks who "just don't get it."
The "it" is the "smell test."
Legal or not, de jure or de facto, there's just some stuff that doesn't smell right. It doesn't seem fair. It doesn't look good for the folks in the cheap seats.
First there's Mr. Grasso, 35-year veteran of the New York Stock Exchange. Not one wolf, but a -pack of wolves were put in charge of the compensation chicken coup. We're not talking about Wendy's or Home Depot or Bill Gates at Microsoft, where true capitalism rules. For investors in these companies, are perhaps their managers, greed is not just good, but very good. We're talking about a regulatory agency where the guy or gal in charge is doing the work of all investors, not just Fortune 100 moguls.
Mr. Grasso, who reveled in never getting a college degree, and according to the Wall Street Journal was delivered from his Long Island home each morning to the corner of Broad and Wall in an armored car, was handed a $191 million pay package over 10 years. The last installment was going to be $48 millionor so, including a performance bonus for getting the post-9/11 NYSE up and running lickety-split, as he was supposed to do.
Keep this in mind: one of the catalysts for the secret pay negotiations, secret pay award, and secret salary was Sandy Weill, the billionaire who controls Citigroup-Travelers Insurance-Smith Barney - hardly an uninterested observer.
So now comes the "interim" NYSE CEO, John Reed, who mowed the lawn, pulled the weeds, trimmed the hedges, fertilized the soil, and prepared the flower bed in which the Glass-Steagall Act could be buried. If you don't remember your course in Great Depression 101, this was the key consumer protection legislation which kept banks, brokers, and insurance companies from crossing into each other's lanes.
Reed retired during Clinton's cozy reign; Clinton's Treasury Secretary Robert Rubin does not return to Goldman Sachs but heads for Citigroup; lobbyists bribe Members of Congress to change the rules, and you can now buy annuities in your bank lobby, and insurance with your Citigroup credit card, and get a mortgage from your stock broker. Along the way Citigroup never mentions the billions in Brazilian loans and the insurance required to cover the defaults in the same loans, and the evolution of a banking and investment banking world which treats small investors and customers worse than ever before.
Not to pick on Citigroup: let's talk about AT&T, the shadow remnant of the old Ma Bell. Let's assume (a big leap of faith), that much of AT&T's trouble was caused by unfair competition by Sprint, Vodafone, Worldcom, MCI, email, and two kids with soup cans chatting in the backyard. With all benefits of doubt, how did you feel when adjusted for spin-offs, distributions, trailing stock, and reverse splits, your $52 worth of AT&T got clobbered in the tech debacle down to $13.45 and in the last year has clawed back to just $22? Pretty good performance, right? Not!
So David Darmon, current CEO of AT&T, comes along with management experience with Sprint, SBC, Pacific Bell, etc., and shows the same insensitivity as the Grasso bunch.
Now, let's be fair. Mr. Darmon must be a very bright guy. His official bio says he finished four years at Georgia Tech in just three years. So how come a smart guy whose investors have lost their jewels in recent years decides to arrive at his company's annual golf tournament in Basking Ridge, N.J., at 8 a.m., live on national television, via helicopter?.
Was the practice tee wet and the chopper needed to dry the tee box?
Did the Garden State Parkway, Route 22, and the Jersey Turnpike all close for emergency repairs?
Was Darmon taking lessons from Greg Norman, who insisted that chopper arrivals improve one's golf handicapped?
Or did he just make a grand entrance today because he could, and other CEOs at the tourney would be impressed, and there isn't a damned thing a shareholder can do about it?
Maybe he was just setting the right tone of thrift, budgeting, and tithing for the event, which was a fund-raiser for an AT&T employee who died of cancer.
So, the greed and "just don't get it" goes on and on.
What about politics? Don't get me started.
Well, maybe, just one item, from local talk host Dick Farrel's WPBR-AM radio show this morning, talking about California's recall election. He referred to the judges as the Ninth Circus Court of Schlemiels.
Former UPI newsman Mark Scheinbaum is past publisher of New Jersey's largest circulation business magazine, and is a licensed stock broker, insurance and annuity agent for Kaplan & Company; www.kaplansecurities.com in Boca Raton.