Blogosphere Comments on Dennis FitzSimons

The reaction to the excessive payout to former CEO of the Tribune Company is rather one sided, that is unless you’re a Tribune Boss at the Los Angeles Times Olympic Production Facility. This blogger feels the former CEO should have received one year’s salary as a severance, not a twenty-year severance package. Below are the softer comments from the Internet regarding this grand golden parachute.

"Yeah, this is the kind of greed/excess/stupidity that gives capitalism a bad name, unfortunately."

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"Actually, this sort of thing isn’t capitalism. Capitalism relies on the principle of supply and demand. This is nothing more than legal theft."

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"CEOs, (like all employees) ARE a commodity that is responsive to supply and demand forces. Companies hire CEOs (or promote them) and offer such deals because they don’t want said individual to work elsewhere. We can argue whether FitSimmons’ performance with the company merited this payola, but it was probably negotiated when he started or during peak performance evaluations by the board. To sum up… yeah, this was capitalism as excessive or as it seems.

You’re right, and the problem is that way too often a CEO’s salary and bonus structure isn’t tied to performance at all, OR it’s solely tied to the bottom line, which doesn’t take into consideration how you get there or what the future repercussions are of any shortsighted actions.

I’ve got an MBA, and two of the first things you learn in graduate business school is that 1) employees always make up the biggest portion of your expenses, and 2) you only get a tiny percentage of increased revenue (depending on your profit margin), but 100% of a decrease in expenses goes straight to the bottom line.

So in other words, if you cut employees, your profit is going to go way up, WAY moreso than if you work to increase sales and revenue.

The truth is that a large percentage of these CEOs who make these millions and millions of dollars were hired for the very purpose of axing people. This is especially true for today’s newspaper industry which has consolidated into huge corporations that have shareholders who want to match the 10 and 11 percent gains they were used to getting.

So we have a lot of newspapers who are now eating themselves alive in a desperate attempt to keep shareholders satisfied. The CEOs who are proven good eaters will continue to make millions until there is nothing left to digest.

Independent newspapers, those few that remain, are a heck of a lot healthier (and better places to work, I’m sure), than those that sold out."

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"You also may have learned, or observed, that companies as they grow gain many folks that aren’t very productive (deadwood). Middle managers are often pointy-haired Dilbert manager types that think more employees = more important and promotion, so they often encourage it to the detriment of the company. That being said CEOs’ salaries often seem to border on the obscene, as do professional athletes’ … so what is fair, good, just and true … who do you appoint to determine these things? There should be market forces at work for these positions and salaries. Ideally in a capitalist system the errors where worth is overrated (as this may be) should be corrected over time. Sometimes it comes too late, but even so that is, in a macro-economic sense, still a market correction."

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"Dennis probably cost Tribune Co as much as Conrad stole from Hollinger International, he just did it with his boards approval. Good Bye & Good Riddance!"

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"Lord Black also had the approval of his board, but Fitzgerald decided that he should still be incarcerated, and was able to convince a jury likewise. "

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"For years, Tribune management has done little to improve the company's bottom line beyond cutting costs and eliminating jobs. If Sam Zell really means to grow Tribune, rather than sell off its most profitable parts, getting rid of existing management, no matter what the cost, would be a good first step. FitzSimons doesn't deserve this payment after the poor job he has done, but what failed corporate executive does? It may be hard for some to see the difference between Black’s and FitzSimons’ thievery, but this is the way of the world."