SNEAKING CEO PAY BY THE STOCKHOLDERS

Hyrum Frazzle, CEO of Healthcare Inc., is meeting in his office with Sarah Titcious of accounting firm Hurrah, Weir, Offshore, Intruste & Profitt.

"Sarah, I’m really discouraged about how the world is jumping all over CEO compensation these days. Everybody is implying we're a bunch of crooks."

"Well, Mr. Frazzle, there’s been so much publicity about how CEOs cooked their books and then had to go back and restate earnings that a lot of trust has been lost."

"Now don't you start in on me, Sarah. The only reason we had to restate earnings was that I had to meet certain arbitrary and impossible expectations in order to make the numbers that would keep our stock up and make my options pay out."

"My heartfelt sympathies, Mr. Frazzle. I would have done the same thing. But now your board is bending over backwards to be hard on you."

"At least they didn't make me give back any of my bonuses and stock option profits."

"There isn't a single CEO who overstated earnings who gave a penny back, Mr. Frazzle. You were lucky to be able to keep compensation based on false numbers."

"Maybe. But they haven't given me a decent stock option deal in two years."

"The board has raised your bonuses, sir."

"A mere piddling, Sarah. And they’ve cut out a lot of my perks. They won’t cover my club dues, my entertaining. Hell, they won’t even pay for my laundry anymore."

"It’s despicable, Mr. Frazzle."

"The damn stockholders are watching everything."

"Well, er, not everything, Mr. Frazzle."

"No? They're not? What aren't they watching?"

"Pensions, Mr. Frazzle. Pensions. Nobody is keeping an eye on pensions as a component of executive compensation."

"Oh hell. What do pensions amount to, anyway?"

"Yours doesn't amount to much, but some other CEOs are really cashing in big on pensions, Mr. Frazzle."

"Yeah? Who, for instance?"

"You know Hank McKinnell, CEO of Pfizer?"

"Sure. He's got a big pension?"

"According to a study by The Economist, McKinnell's pension is worth over seventy million."

"Seventy million? Sarah, that’s real money."

"It sure is. It's more than he made the whole time he was running the company."

"Aren't the stockholders yelling and screaming?"

"No. They don't know about it, Mr. Frazzle."

"Why not?"

"Pensions or defined benefit plans don’t have to be disclosed. It takes a lot of research and a lot of money to find out what a company's CEO is getting in retirement benefits."

"Are you sure, Sarah?"

"Yep. Nolan Archibald at Black & Decker has a pension so big it amounts to about one percent of the company's total value."

"So this big pension thing is widespread?"

"It's getting wider every day, Mr. Frazzle."

"And the our stockholders don't have to know about any of this?"

"Nope. They'd be completely in the dark, Mr. Frazzle."

"Well, Sarah, what are you sitting around here for? Get back to Hurrah, Weir, Offshore and work me up a big pension proposal for the board."

"Right on it, chief."