chief takes aim at CEO pay
By Al Lewis,
Tuesday, December 13, 2005
Now that Leo Hindery is no longer a chief executive officer,
he's taking shots in a new book: "It Takes a CEO; It's Time
to Lead With Integrity."
Hindery, who was chief executive of Tele-Communications Inc.
until selling the Denver cable giant to AT&T in 1999, now
runs a private equity firm in New York City. These days,
he's got plenty to say about corporate villains:
"He was a screamer and a yeller," Hindery writes of
convicted former Tyco chief executive Dennis Kozlowski. "The
things that put him in line to become a CEO - his raw, naked
aggression; his self-promotion - were the very things that
should have disqualified him."
"Ken Lay simply doesn't care that he destroyed his workers,"
Hindery writes of Enron's former chairman.
John Rigas and son Timothy, both convicted on felonies for
their role at cable company Adelphia, subsidized side
businesses and paid for family vacations and country-club
memberships as they fudged their books. "It all amounts to
absolutely incontrovertible evidence that John Rigas was
never cut out to be a CEO," Hindery writes.
In a phone interview, I asked Hindery if he'd met Rigas,
WorldCom's Bernie Ebbers, or other corporate felons.
"Yeah," Hindery said. "And I hope they rot in jail. My only
regret is that some of them are so old they won't rot."
Hindery's book criticizes deregulation, offshore labor,
health care and even Wal-
Mart. But a common denominator, he says, is excessive
executive compensation. He notes that the average CEO makes
304 times what his average employees get. "If you're a CEO
in the United States today," he writes, "you're probably
Hindery said he made about $900,000 a year at TCI, while his
average employee made $55,000. Hindery's big payday came
from his TCI stock, which he had held since selling his own
cable assets to TCI before he became TCI's chief executive.
That stock was reportedly worth about $250 million at the
time of the AT&T deal.
And what kind of CEO was Hindery?
"I would hope most people would say 'He talks the talk and
walks the walk,"' Hindery told me.
Nell Minow of The Corporate Library, which tracks governance
issues, said she likes the message but is wary of the
messenger. "I have a little bit of indigestion after
consuming these 'Now-I-get-it' memoirs," she said.
Hindery has amassed a personal fortune reportedly worth more
than $500 million. In Larkspur, he's selling his Lazy H
Ranch for $12.6 million.
He became TCI's chief executive when the company was
hemorrhaging. He struck several swaps, mergers and
acquisitions that swiftly turned TCI's fortunes. He then
sold TCI to AT&T - which was great for TCI shareholders but
helped spell the end for AT&T.
"Leo dressed the bride for a sale to AT&T for
top-of-the-market prices," said longtime Denver cable
analyst Ted Henderson of Stifel, Nicolaus & Co. "I give Leo
accolades for getting that sale done."
And what about AT&T? "AT&T didn't do their homework,"
After AT&T, Hindery went to work for Gary Winnick, who made
his fortune working with junk-bond king Michael Milken. In
2000, Hindery became interim chief executive of Winnick's
debt-ridden telecom startup, Global Crossing, which went
through five highly paid CEOs before filing bankruptcy in
Hindery held the job for six months. He was to get about $1
million in salary, $2 million in stock options plus $20,000
a month on his New York City apartment. He sued Global
Crossing when it didn't pay. Also, before Hindery quit, he
warned Winnick and other executives in a memo - later made
public - that Global Crossing was headed for disaster.
"I have a vision," Hindery writes. "The CEOs of this
country's thousand largest companies band together, storm
Capitol Hill and declare their collective determination to
launch the equivalent of a Marshall Plan to help rescue the
U.S. economy and its middle class."
Yet, these days, who could trust an army of CEOs to save the
"When you're writing books, that's what you recommend to
CEOs," said Henderson. "When you're a CEO, that's not what
you recommend to yourself."
Al Lewis' column appears
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