The big news (albeit not surprising) last week, for those of us in the IT industry, was that overall PC sales continued to slide year over year, this time by another 9.7% - far worse than expected. Sales of PCs and laptops are now in "free fall". Analysts have consistently underestimated the extent of sales erosion - largely due to smartphones and tablets.
Meanwhile, two weeks ago, we learned that Lenovo, based in China, and now the world's largest PC maker, had overall revenue growth of 10%. Most of their sales growth was in smartphones and tablets - PCs were flat even though overall industry PC sales dropped 10%.
How It's (Not) Done
Just today we learned that Lenovo's CEO will share his personal bonus with employees, for the second year in a row - an amount that equals a month of an average employee's pay. Yang was paid ~$15 million in total compensation which is roughly the same amount that Dell and Meg Whitman are getting paid to run their respective companies (Dell/HP) into the ground. Yang makes the same pay to vastly outperform and yet still shares it with employees. Meanwhile, the highest paid CEO in the past two years (other than Steve Ballmer who walked away from Microsoft with $15 billion despite losing 50% market cap in 13 years) was Tim Cook of Apple. He made a ludicrous $325 million back in 2011 (which includes 1 million restricted shares) and since then Apple's stock has lost 30%. Unlike Ballmer who made money by resigning, Cook gave himself an unplanned haircut, since in 2011 at the top, his stock was worth a totally ridiculous $600 million even though he was just starting his job as CEO.
Pay for Non-performance
Consistent with the PC story, last week we learned from a major study, that no surprise, there really is no connection between CEO mega-pay and CEO performance. In fact an astounding 40% of the top performing CEOs in the past 20 years were fired, put in jail or bailed out by Uncle Sam. The raw data is here, and as you would expect many of the names on this overpaid list are from Wall Street.
Notable names from all industries include:
Notable names from all industries include:
Dick Fuld/Lehman Brothers - Paid $466 million to bring down the world economy
Jimmy Cayne/Bear Stearns ($182m) - Bailed out by the Fed, and sold for $2 per share to JPM
Ken Lay/Enron ($218m) - world's greatest corporate fraud
Hank Paulson/Goldman Sachs ($100m) - Treasury Secretary overseeing Wall Street bailout
Stan O'Neal/Merrill Lynch ($160m) - Fired just before the company had to be bailed out
Business as Usual in the Temple of Greed
To the Idiocracy, this level of egregious greed and malfeasance is just "business as usual". Nothing new under the sun. Therefore the stunned dunces at large will learn the hard way that history is cyclical and that periods of abject greed and decadence ALWAYS end badly...
