The Greed Beat

Diane Francis Saturday gossip column March 9:

NEW YORK CITY - The investing public got a glimpse into the true extent of obscene executive payouts this week thanks to proposed Securities and Exchange Commission disclosure requirements.
Citigroup voluntarily and shamelessly complied ahead of time by revealing the true extent of its Chairman's remuneration. It showed, for the first time, the true cost of corporate jet travel by executives, a perq that is widely abused in Canada too.
Citigroup Chair Sanford Weill was paid US$21.5 million and the company also paid his taxes. Citigroup's CEO got a 16% raise or US$23 million last year despite the fact that shareholders only enjoyed a 1% increase in the value of the company's shares.
Mr. Weill's use of company planes was calculated at US$524,000 for the year. The company also forked out a small fortune paying other personal bills for him. His medical and dental benefits totalled US$61,846 and personal financial planning advice US$85,714.
Other execs also had the same benefits.
Worst of all, Mr. Weill is due to retire this year and has been given lifetime use of the company jets on top of his US$1.1 million-a-year retirement benefit.
The Commission hopes such enhanced disclosure rules, which won't kick in until 2007, will embarrass executives and enlighten shareholders into demanding lower payouts.
The rules go much further and should be enacted by the Ontario Securities Commission too.


OTHER PERQS

It seems that some top dogs feel they are entitled to other "perquisites" that won't be revealed in the proposed disclosure requirements.
In 2004, Morgan Stanley paid US$54 million to settle a lawsuit brought by women complaining about breast-shaped cakes, lewd comments and strippers in the office.
Saleswoman Laura Zubulake last year won a US$29-million verdict against UBS AG, Europe's biggest bank.
In January, six women sued Germany's Dresdner Kleinwort Wasserstein for US$1.4 billion because they were cut out of strip parties where huge bonuses and promotions were doled out.
And last week the latest lawsuit hit Societe Generale's New York office. It was sued for US$450 million by a former employee, Kristin Polidori, who claims that her boss made lewd suggestions to her and bragged about his sexual exploits with colleagues.
"Societe Generale takes allegations of sexual harassment very seriously," read the bank's statement.


LITIGATION HIJINKS

The nasty spat between Biovail Corp., Eugene Melnyk and a couple of analysts took a new turn in the New York tabloids last week. The Canadians hired attorneys to pursue legal remedies in the dispute and those lawyers hired two private detectives.
These detectives were caught on camera removing the trash from one analyst's house and accused of following another's wife.
Melnyk and Biovail did not hire these gumshoes, but their lawyers did, according to the New York Post.


OUTSOURCING THE PRESS

India is the darling of the world of outsourcing. This is because it has a pool of educated workers who speak English that is twice the population of North America.
It's been highly publicized that the call centre world is moving there as fast as they can build cubicles in Bangalore. And outsourcing is taken very seriously. One company had two million applications for two jobs.
These people are very professional. Some are selling goods and services. Others are providing service advice to people struggling with new computers or other electronic devices.
Before they start on the job, workers are trained carefully, given elocution lessons and taught colloquialisms and local turns of phrase.
The migration to India of call centres is well known, but few people realize that virtually every service is being re-examined as to its suitability for outsourcing there.
For instance, American hospitals are e-mailing everything from x-rays to MRI, catscan and petscan results to Indian doctors for analysis and diagnosis at a fraction of the cost in the U.S.
Even journalism is being outsourced to India. Last year, Reuters, the news giant, hired dozens of Indians to read corporate materials and press releases and convert them into journalistic stories for their wire service around the world.


REALTORS AND DODO BIRDS?

New businesses are sprouting up in the Big Apple and elsewhere which will end up disintermediating or eliminating the traditional real estate agents and their 5 to 6% fees.
For an average of US$750, homeowners can have their property evaluated and listed. Agents will show the property to prospects for a fee of US$50 an hour. And a closing, which includes all the paperwork, is another US$500.
Real estate may be the next target for disintermediation, thanks to the Internet which has changed the travel and brokerage businesses.
More interestingly, anti-trust authorities are looking complaints by these new operators about lack of access to MLS listings and whether fixed commissions amount to illegal price fixing.