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Ex-TCI chief takes aim at CEO pay
By Al Lewis, Staff Columnist
Denver Post
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 overpaid."

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," Henderson said.

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 2002.

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 middle class?

"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 Sundays, Tuesdays and Fridays. Respond to Al at denverpostbloghouse.com/lewis, 303-820-1967, or alewis@denverpost.com.

http://www.denverpost.com/business/ci_3303343