(FORTUNE Magazine) – CEOs--Their Comparative Value
WHAT A WONDERFUL and frustrating contrast in the July 10 issue. On the cover, Warren Buffett ("Warren Buffett Gives It Away," by Carol Loomis), who lives in the house he's owned for three or four decades and has been a model CEO. He draws a salary of $100,000 a year and rejects stock options. His compensation is the increase in the value of his shares. When his company prospers, so does he. Then we have Bob Nardelli ("The Real CEO Pay Problem," by Rik Kirkland), who "earned" $250 million last year, and William McGuire, who "earned" (mostly via stock options) perhaps as much as $1 billion. Home Depot has provided minimal return to its shareholders, but Nardelli walked away wealthy beyond reason. He essentially refused to answer questions at the annual meeting, and none of the outside directors even bothered to show up. Oh, that we had more CEOs like Buffett and far fewer like Nardelli and McGuire.
BOB O'BRIEN, Austin
For more reader views on CEO comp, see "How Much Is Too Much?" below.
Competition in Mexico
ALTHOUGH THE WORD "competition" doesn't appear in the Chapultepec Accord ("And the Winner Is ...," by Feike de Jong, Dispatches, July 10), there are numerous references in it to competitiveness in various national endeavors, and an awareness of the importance of competition in the Mexican economy is implicit in the document. It was written for the benefit of all the Mexican people, which is why it was signed by all--not just a majority--of the governors of Mexico's 31 states, plus the head of the Mexico City government. Finally, Telmex has various competitors, and they are at liberty to gain market share by competitive pricing and quality of service. It is important to note, however, that Telmex is the only communications provider that serves the entire market, while its competitors focus on higher-level residential and corporate business.
CARLOS SLIM HELU
Honorary Chairman for Life
Carso Group, Mexico City
MEXICO IS NEITHER a plutocracy nor an oligarchy. Cemex, Grupo Modelo, and Telmex are world-class companies that have acquired their position by brilliantly executed strategies over decades. They are no more oligarchs than GE, J&J, Citigroup, or Telefónica de España. "Industry leaders" would be more accurate. Sure, there are issues of competitive pricing and fair play. But Mexico is a very pluralistic democracy, which guarantees that many voices will be heard by the new President. I hope business is one of them.
How Much Is Too Much?
UNLESS THE CEO stuffs the money in his mattress, there are only four things he can do with it, and they're all good: (1) Spend it--which stimulates the economy and helps create jobs. (2) Invest it--which provides capital for construction, mortgages, and other essential loans. (3) Donate it--which provides relief for the needy. (4) Pay taxes--which means the rest of us can pay less. So what's the big deal? (Except in our envious minds.)
Central Lake, Mich.
RE HANK MCKINNELL'S comment that "nobody has any idea what the right level [of CEO compensation] should be": It's a whole lot less than he's been paid. He's either delusional to think his compensation package is deserved or he's putting his interests in front of his shareholders'--neither of which is desirable in a CEO.
Pearls of Bingdom
IT TAKES self-discipline each month to read the rest of FORTUNE before I treat myself to Stanley Bing's column on the back page. I thought his full-length article on the "Secrets to a Happy Retirement" (June 26) was brilliant, and I didn't have to wait till the end to get to it! We knew he was hilarious. Now we know he's also wise.
Fair Play for Wal-Mart
IN "WAITING FOR Wal-Mart" (May 15), John Elliott says Indian business leaders are blocking Wal-Mart's entrance into the Indian marketplace. But the very practices they fear from Wal-Mart and other multinationals are the ones Indian companies have been using against U.S. companies and workers in IT, manufacturing, and health care, to name just a few industries. Maybe the U.S. should adopt policies and tariffs to level the playing field.
Tree of Life?
THE SWEDISH COMPANY Promessa Organic ("Six Inches Under," by Eva Barkeman, First, June 26) is doing a splendid thing. The plants that grow from the soil created from human remains will always make us feel the person is indirectly still with us. In a way it gives us solace. Susanne Wiigh-Mäsak has done a great good for society. I was really overwhelmed by this article.
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