A homeowner in Waukesha for 20 years, Steve is president of the Waukesha Dog Parks Organization and enjoys motorcycling, fishing and staying on top of politics.
I suspect that even the most conservative of us get a bit envious and bewildered when we read about big pay and bonuses for executives when business is dropping for a company.
Locally, Harley Davidson, a Waukesha county business, had it's 2008 income drop 30%, it's stock price fall 62% yet president and CEO James Ziemer received a 12% boost in salary and a 26% jump in total compensation. We're talking over $1,000,000 more money for running a local company that is going downhill with the rest of the economy. How can this be?
Well, before you call the Democratic party and report The Motor Company to the government's department of acquisition and pay adjustment, let's examine who is to blame. Stockholders are.
At the risk of giving the impression that I'm rich, I do own some stocks and consequently receive mailings by these companies from time to time. Once a year I'll get a huge annual report from each stock and an invitation to attend the annual meeting. It is at this point that we need to understand that stockholders get what they deserve.
During the annual meeting, which is required by law for publicly held companies, like Harley Davidson, the board of directors will be voting in new directors and voting on issues that the bylaws of the corporation require. Many times this includes pay and benefits. Inside the annual report package is a postcard to send in to indicate if you are attending the meeting or if not, who you will give the power of voting on your behalf. That person is called a proxy.
The short of it is that unless you attend the meeting and vote, you will have given a board member the power to act as a fox in the hen house when it comes to voting. Oh, there are the responsible board members who are truly interested in the best for the company and the stockholders. But there are those that do not. I don't see much difference between these board members and politicians with the power to vote their own raises and benefits.
This goes on in many businesses, but I use Harley Davidson as an example because I'm a motorcyclist. As times are tough, the motorcycle won't be getting the attention that I'd like to give it. That means mechanics not getting as much work or hours and people involved with motorcycle accessories having a slowdown too. Many of H-D's customers have a special feeling about their motorcycles. Many to the point of having the name tattooed on their arms. For these motorcyclists who are suffering from the economic turn-down, I wonder how they will view Mr. Ziemer's pay package?