Wednesday, April 21, 2004

Cendant and the concentration of wealth

Title: Cendant Chief Takes Pay Cut
Source: NY Times
Date: April 20, 2004

The title of the article is humorous once you read the article. The article mentions that Cendant's CEO, Henry R. Silverman, has received:
  • a $3.3 million salary
  • a $14 million bonus
  • option gains of $37 million
  • $1.025 million in pension fund contributions
  • $4.574 million for a $100 million life insurance policy
  • "$260 million in option gains from 1998 to 2003 and $287 million of unrealized option gains as of Dec. 31, 2003."
  • A $996,000 per year consulting contract for life
  • A huge severance package if fired
All of this adds up to well over half a billion dollars. All of it going to a single person. One can only imagine what the number would be if it included the entire management team at Cendant.

That half a billion dollars has come from consumers. It has come from you each time you buy something from a Cendant company. Multiply this by thousands of immensely overpaid executives and you understand how the concentration of wealth works. Your household is paying over $1,000 per year to support these immensely wealthy individuals. Since these salaries are accelerating, the concentration of wealth is accelerating.


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