It’s not often you find a trade magazine, the current National Post Business magazine, detailing a hilarious collection of goofs and mad goings-on in the staid business world. You have Allan Markin, chairman and co-owner of Canadian Natural Resources, taking a leave of absence while suing his stepson for $2 million dollars for allegedly taking possession of Molly, the family Dalmatian. (Heavens, can’t he find something more important to do?)
Then you find last January, an Alberta judge declared self-styled “mad scientist” Sheldon Zewitt guilty of stock fraud and sentenced him to four years in prison and a gave him a $1.85 million fine for convincing hundreds of shareholders that he and his VisualLabs had created a proprietary 3D television system. Investigators found that one purported device was an Electro-home projector with the cables not even attached. Another, a store, bought a Sony with the name plate removed. Purported patents were found to be scientifically unworkable. Where is Zewitt living now? As a fugitive in a $1.5-million mansion in Prague with his wife and 10 children. (Can’t that guy be lured back to Canada with the promise of a generous loan from our Canadian Development Bank?)
And the Bank of Montreal’s Tony Comper wins a kudo for forthrightness when he announced: “As steward of this indeed rare company, I pledge more of the same.”
Conrad Black attempted to dismiss shareholder revolt over fees paid to his management company by calling corporate governance a “fad.” (A “fad”? What Conrad needs is another National Post to unload on the Aspers.)
Belinda Stronach took home a modest $175,000 from Magna International, which is hardly enough to pay for the gas to fly around in the company jet aircraft anywhere she wants. To help make ends meet, her dad’s firm coughed up a $6.3-million bonus and $2.7 million in stock options, which added up to $9.1 million in 2002. (Can you imagine a suitor saying: “Belinda, let me take you away from all this?”)
Employees of Robert Brown, after he was relieved of the helm at Bombardier, said they wouldn’t miss him because so few had ever seen him. (To avoid that problem in the future, Mr. Brown, wear a loud tie and go around the office and shake hands with a few employees.)
Kim Hart, president of Vancouver’s Sungold Entertainment Corp., pleaded guilty to tax evasion in November 2002. He added numbers to cheques to make his expenditure on shares look larger, thus understating his capital gains. He also altered a cheque made out to “Cash” to read: “Wally Cashman.” He then presented the cheque as a payment for Sungold shares. (Kim or Wally, you can’t get away with that.)
I think that we all perversely enjoy dumping on people who make mega-bucks. Between 1980 and 2000, CEO pay in the U.S. increased from approximately 42 times that of the average worker to 531 times. Canadian tallies are lower, but there are some staggering exceptions: JDS Uniphase Corp., for instance, paid Josef Straus $229 million in 2001. As University of Toronto professor John Crispo said: “Canadians can’t claim quite as many pigs, but we do have some piglets.”
Ripping off the shareholders of a company has got to be as American as apple pie. Teamsters, where are you when we need you? Most Canadian CEOs, when they retire, don’t plan to do anything earthshaking. One said, “Restore my Porsche.” Another said, “Cook.” And another said, “Rest in my coffin.”
CEOs should remember the old poem:
Out of this life ,we can never take
things of Gold and Silver we make.
Although we admire a painting rare
on the wall we must leave it there.
Will the soul that answers the call for me
find that my soul has gathered some riches too?
Or will it be mine to find
that all I worked for I left behind?