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Former San Diegan Graef Crystal, one of the ranking experts on executive compensation, says on his website (GraefCrystal.com) that Ed Whitacre is a bad choice to be non-executive chairman of General Motors. The government recently appointed him. Whitacre became the head of SBC Communications, since renamed AT&T, in 1990. From then until his retirement, AT&T stock lagged the Dow Jones Industrial Average. From 1994 onward (the first date on which data were available), Whitacre raked in $507 million in total compensation, averaging out to $38 million a year, says Crystal, noting that Whitacre was "one of the most excessively-paid [chief executive officers] in the land." And when he left in 2007, he still had millions of dollars coming. Then there is the second question: what does Whitacre know about cars? He has admitted he knows nothing, but thinks a good manager can run anything. But that is a myth that has been exploded; you have to know the territory, say astute management experts these days.

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Comments

SurfPuppy619 June 15, 2009 @ 1:23 p.m.

He has admitted he knows nothing, but thinks a good manager can run anything.

I agree with this statement 100%.

The question bcomes is Whiteacre a "good manager", certainly not when he is being judged on his record.

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Don Bauder June 15, 2009 @ 4:34 p.m.

Response to post #1: One of the biggest frauds perpetrated on investors is the notion that a good manager can manage any kind of enterprise. Remember what happened to the conglomerates of the 1960s? Just about every one of them fell apart. General Electric has finally come asunder. Jack Welch, one of the bigger phonies around, was cooking the books by manipulating numbers in the financial part of the business, which was half of GE. Nardelli left GE convinced he could run anything. He messed up Home Depot and then Chrysler. The stories go on and on. "Ya gotta know the territory." Period. Best, Don Bauder

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SurfPuppy619 June 15, 2009 @ 5 p.m.

Nardelli is not a good example, that's for sure.

But I think the key to any business, be it 7-11 all the way up to Wal-Mart, is good management.

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Don Bauder June 15, 2009 @ 7:49 p.m.

Response to post #3: Yeah, but 7-11 and Wal-Mart are both retailers. But can an expert in retailing run a steel company or a railroad? Of course not. Best, Don Bauder

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JimG June 16, 2009 @ 8:02 a.m.

Don, if Whitacre is not the man to clean up the company, then why was he appointed? To keep the lid on something?

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Don Bauder June 16, 2009 @ 8:48 a.m.

Response to post #5: I would not be surprised if it is another coverup, and Whitacre is the man to keep a lid on the truth. AIG is another example. Best, Don Bauder

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