Conference 7.286::digital

    So who is going to volunteer to stand up at the shareholders meeting
    and ask the question.
    
    	"Please could you explain why Jack Shields was given $1.2 million
         to leave the company?"
    
    He who proposes disposes, interesting thought...
    
    Dave

    Sheesh, we could have kept the bottled water...
    

    
    re .1
    
    I think that company employees are not allowed to ask any questions in
    the share holders meeting. Am I correct !  Some kind of open door
    policy ?
    

    This should start an interesting discussion.
    
    I think the defacto practice is: there's no prohibition against an
    employee shareholder asking questions at the annual meeting, but if you
    ask, and such questions causes public (and we're not talking "notesfile
    public" here) embarassment, then expect repercussions when you return
    to your cube.
    
    There may even be an annecdote to this effect somewhere buried in the
    conference.
    
    My opinion is that there is ample opportunity to ask questions within
    the company, behind the doors so to speak, or if you want to be
    indirect, to contact the press, and suggest they ask the question.

    
    Ref: .0
    
    There are buyout offer programs...
    and there are buyout offer programs.
    

    I've asked Tom Eggers to share his "ask a question at the stockholder's
    meeting" story with us...

   Aw, for pete's sake, what are we whinging about here. It is well known that
   Jack Shields was on a Salary in excess of $500,000/yr and naturally,
   associated benefits to him, upon resignation would be in the same order of
   magnitude. Now there are those of you, who claim that senior executives of
   this corporation are dreastically overpaid. In reply, let me just say that
   the same adage used by people at the "lower" end of the corporation
   applies. "If you pay peanuts, you will get monkeys." In my personal humble
   opinion, Jack Shields earned every penny he got, as does Ken et al.
   
   q
   
   

	I agree that Ken is worth his pay check. I can agree that
	Jack Shields earned his pay while he was here. But if he
	left on his own or was fired with cause (I don't know or
	care which) than why pay him $1.2m on the way to his new job
	running the competition? When I left DEC to go to work for
	the competition (some 12-13 years ago) I didn't get rewarded
	for it. :-)

			Alfred

    IMHO there are two issues in the base note. One involves
    employee/stockholder rights, while the other pertains to the "package"
    provided to a departing employee (who happened to be an executive
    officer and a long term employee). 
    
    I'll offer my $.02 on the latter and leave the other for others.
    
    Jack Shields was a major contributor to the success of Digital for a good
    number of years and earned (IMO) his position as a corporate officer. I
    do not claim to have any special insight as to the reasons for his
    departure. Instead, I'll accept that there were irreconcialable
    differences between Jack and K.O. that necessitated Jack's departure.
    
    If I reflect on what our executives' salaries are, Jack's tenure, and
    the "package" as offered to other employees, I have to conclude that it
    was a relativly modest package and that it was fair to all concerned. 
    
    BG      

    Not defending the point but, if Jack earned over $500,000 a year, then
    had he simply been made redundant under the scheme, would he payout
    have not been exactly the same amount !
    
    Bar trying to fire him for "gross misconduct" which I am sure was never
    even considerable, I d oubt if Digital could have got away for paying 
    him much less.
    

    I can't help but wonder if DEC's fortunes would have fallen so fast and
    so far had Jack Shields not left the company.  Jack knew what had to be
    done to turn the company around, but his hands were tied.

re:                      <<< Note 1204.11 by SALEM::LORANGER >>>

>    I can't help but wonder if DEC's fortunes would have fallen so fast and
>    so far had Jack Shields not left the company.  Jack knew what had to be
>    done to turn the company around, but his hands were tied.

There seems to be large numbers of people, especially in the field, that
feel he was part of the problem and not part of the solution.

I received five memos this morning stating that saving $100,000 is equivalent
to a $2,000,000.  I guess that means that saving $1,200,000 is equivalent
to a $24,000,000 sale.

    As I recall, there were some people back at corporate who considered 
    him a large cause of the problem by allowing (encouraging?) his SSMI 
    organization to grow so huge.  I also recall seeing a management memo 
    that came out some 6 months after the stock market crash of 87 that 
    stated that, despite the need to curtail growth, the company was still
    hiring (or growing, can't remember which) at a rate of 100 people per 
    day.  Not that SSMI was doing all the hiring.  Probably just most of it.  
    Part of the headcount problems Digital has today are due to the 
    empire-building that was rampant during the later Jack Shield years.
    
    

    re: .7
    
    I couldn't agree more. The people that try to keep us in business and
    employed deserve what they get in compensation, a hell of a lot more
    than some idiot who can bounce a basketball or throw a baseball. We
    should be investing the outragous salaries the `sportspeople' get into
    education and research and let them get a real job. Sorry its just a
    hot button for me. I would have no problem with K. O. making $40M a
    year, his contribution to society (and the companys) is worth
    infinitely more that Rocket Roger's, and Ken carries his own
    briefcase.
    
    Just my humble opinion

    re: .14
    
    Each and every citizen must be allowed to determine their worth in a
    free marketplace.  If that means that the market's sense of values
    don't agree with yours, TFB.
    
    Ken or Jack don't "deserve" any more or any less than their peers in
    the industry.
    
    Al
    

    re .13

>                              ... I also recall seeing a management memo 
>   that came out some 6 months after the stock market crash of 87 that 
>   stated that, despite the need to curtail growth, the company was still
>   hiring (or growing, can't remember which) at a rate of 100 people per 
>   day....

   
    Actually, I recall a story about Jack having a meeting with his direct
    reports where he told them how many people could be hired that year.
    Later that year, Jack found out that _each_ of his direct reports had
    gone out and was hiring the full number. Jack was not happy, but the
    damage was done.

    (I think it was supposed to be a total of 3,000 for the year, but my
    memory is fuzzy.)

    Let's just make sure we don't go down a love/hate Jack rathole.


    [Just as an aside, it's amazing how much less colored one's
    opinions get as the facts at their disposal increase.]
        
    /Petes
    

    :re 16. 
    
    I like the story, another prime example of management messages getting
    misconstrued.
    
    Regards you other point, agree wholeheartedly it's always far to easy
    to blame someone once they have left and when they are unable to defend
    themselves.

re .15

What free marketplace?

It is just such knee-jerk thinking that is bringing American industry to its
knees. Shor-term, self-optimizing management judgement can do us no good without
a balanced appreciation of long-term goals beneficial to all. Organizational
agrandizement was a major fault of Digital management.

Without stoking the fires of "socialism", I would ask, does anyone really
NEED these exorbitant salaries. Past the salary level where you can gratify 
every possible consumer desire, you spend your time worrying about 
maintaining/increasing the value of that money which is unspent. And what 
eventually happens to this accumulated weath? Since you cant take it with you,  
you leave it to someone who doesnt deserve it, because they didnt earn it.
Wealth is handed over from one generation to another...what free marketplace?

I suggest that executives are there for the sense of power first and
that money is a distant second. 

    re: .18
    
    In our society, money is power.  Do you think people spend upwards of a
    million dollars to get elected to the U.S. Senate because they want the
    salary?  No, they want control over the U.S. Federal Budget.
    
    As for "need", who is to say what is needed?  Consumer desires aren't
    the only desires.  Consider someone who wishes to give money to a
    charity, or university.  It seems reasonable to me that a person who
    has money, whether earned himself or inherited, should be permitted to
    give it to whoever he wishes.  Does a university fail to "earn" money
    given to it if it attracts gifts by providing high-quality education
    to thousands of people over many years?
        John Sauter 

Besides, you'd be simply amazed at just how much one can spend on simple
consumption.  Once you go through the consciousness-raising exercise of
convincing yourself that $750 is a reasonable price to pay for a pair of
shoes, whole new horizons open up before you.


-dave

re 19

You got it right in one. Money is power. To which I add the addage:
"Power corrupts, and absolute power corrupts absolutely"

Isn't there a better way? We aren't the first society to question pecuniary
values. Many Roman writers did the same...not coming to any satisfactory
answer soon enough, considering the result. Shall we repeat Rome's history?

    re .19 -- I think the House of Whores controls the national budget.
    
    Ought'a be interesting to see of KO gets away with running this years
    stockholders' meeting like a private fiefdom.

    
     Let me see if I got this right now. Jack was paid 1.2m after he left
    Digital? My first question is WHY was this paid to him?
    I know the man may be (or was) a CEO but I thought we were tring to
    watch where we spent our money. Cost savings is the name of the game.
    At least that was what I was told. So my next question is WHO said Jack
    could have the 1.2m. Was it K.O.?
     
     Maybe it was part of his agreement to work for Digital in the first
    place. I don't know. But if Jack negotiated his contract with Digital
    and this was a part of it, then he should get it. If this was given to
    him just because he left then then everyone should be treated the same.
    
     I don't know all the story. All I know is what I read in here. I do
    know this company is in TROUBLE. And I want to see it turn around to
    the good side.
    
    IMOHO
    Ben

    Here's another example of a strange policy:
    
    If you are terminated or leave the company voluntarily to go to
    a competitor you are eligible for pay in lieu of notice, generally
    2 weeks for non-exempt and 4 weeks for exempt, this can be increased
    by management if deemed appropriate.  Now if are leaving voluntarily
    and not going to the competition you get zip, zero, nada!  
    
    Try and figure that one out, I can't figure out why you would want
    to reward someone for leaving and going to the competition, but
    the person who is leaving voluntarily and may not even have a job
    or may be going into an entirely different career gets nothing.
    Unless of course you are high enough up in the corporation to rate
    even stranger rewards, ie. $1.2M. 
   
    

    The option is allowed to permit managers to immediately
    have the leaving employee be absent from the workforce where (1) he/she
    could spend their days recruiting for the competition 
    or (2) being involved in meetings,
    etc. involving confidential product/financial information that they
    now no longer are justified to have.
    
    Most larger companies have this type of policy. Some allow the option
    to give pay in lieu of notice for any case.  

I know of another company that had a policy like this.  If you were NOT going
to a competitor and didn't want to work out your notice, you simply refused to
tell them where you were going.  They would assume a competitor and give you
compenstation in lieu of notice.

Bob

    	Think of it as the "buy-out" taken to it's extreme.

    	Jack probably made around $600K per year and had about 30 years
    	in service.  

    	I doubt if his leaving was really his idea, so applying the package
    	to him was apropos.
    
    		-rjc-