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HOLLYWOOD AND THE CIA — Film historian Ed Rampell details Hollywood’s entangled relationship with the CIA and the Pentagon; HOUSES OF THE DEAD: Nancy Kurshan exposes the cruel human rights offenses taking place inside America’s vast gulag of Control Unit Prisons; BROTHERHOOD OF SUMMER: David Macaray charts the history of the most powerful union in the US: the Baseball Players Association; TAR SANDS COME TO AMERICA: Steve Horn explains how the Keystone Pipeline debates have diverted attention from Big Oil’s other plans to transport Alberta’s oil into the US. PLUS: Jeffrey St. Clair on CONSTITUTIONAL ENTROPY; Mike Whitney on HOW THE BANKS TARGETED BLACKS; Chris Floyd on THE RISE OF BRITAIN’S TEA PARTY; Kristin Kolb on THE NEEDLE AND THE DAMAGE DONE; Kim Nicolini on the FILMS OF WILLIAM FRIEDKIN; and Lee Ballinger on POETS VS. THE ONE PERCENT.

April 24, 2006

Self-Dealing Corporate Payouts

Lee Raymond’s Unconscionable Platinum Parachute

by RALPH NADER

Exxon Mobil reports that it is sending retiring chairman Lee Raymond off with one of the most lavish executive compensation and retirement packages in history–an estimated $398 million in total.

This unconscionable windfall cannot be justified by any serious measure of Raymond’s performance, especially since the company’s record-breaking $36 billion annual profits last year had more to do with the Mobil merger, refinery bottlenecks, politically-driven tax breaks and geopolitical events than it did with managerial effectiveness.

The self-dealing that leads to payouts like Raymond’s exposes the failure of corporate boards to protect the interests of shareholders. The conflicts of interest held by compensation consultants and interlocking relationships with other boards of directors make a mockery of any claim to independence. With their rubber-stamp boards, top executives essentially pay themselves, while rendering their shareowners powerless.

The SEC should require that all companies above a certain size put their top executives’ compensation packages up to a proxy vote. If the shareholders believe such pay fails to match performance, they should have a means of signaling the need for restraint.

In fact, this reform has been required of British companies since 2002, one reason British CEOs at similarly-sized companies earn little more than half what their American counterparts do.