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Posts Tagged ‘$6.4M’

Millionaires Don’t Feel Wealthy

According to a recent survey, 4 out of 10 millionaires don’t feel wealthy.  The point at which they do “feel it” is about $7.5M according to the Fidelity Millionaire Outlook who tracks millionaires confidence viewpoint.

And speaking of millionaires, it’s unclear if Mr. Keith Wandell (CEO, Harley-Davidson) is feeling wealthy versus feeling a bit pinched because according to the AP and papers recently filed with regulators Mr. Wandell received compensation valued at $6.4M in 2010, only up 1% from 2009 when he spent just 8-months on the job.  There were stock and option awards totaling $3.02M and a performance-based cash bonus of $2.3M which accounted for most of his compensation.

I know what you’re thinking… in this day an age of splendiferous benefits, where Milwaukee County bus drivers are making a 6-figure income along with many other working class heroes… we need to cut Mr. Wandell some slack, right?  He’s unified the company, changed whatever can be changed, clearly communicated that everybody’s got to get better at everything and today the road signs suggest a turnaround for the heavy-cruiser company.  In fact, if we go by the past year’s stock (NYSE: HOG) price it has hit a 52-week low of $21.26 and a 52-week high of $43.14 which is a home run in anyone’s portfolio!  Yet, with continued oil fears and the Japan crisis who knows if Harley will drive home better numbers.

To be fair, I’m a little guilty of treating some millionaires a bit like a piñata, but I just read a report about how half of the ‘rescued’ borrowers still default.  That’s not the millionaires issue, but when I hear they don’t “feel” wealthy it’s difficult for me to relate!  The housing market is up and then it’s down depending on which paragraph you read in the SAME article!  Where are the jobs?   Just about a month ago we were stunned and hopeful over the unrest in Tunisia and Egypt.  Then concern followed with the Libya unrest and now war preventing Qaddafi from harming civilians which has been quickly followed with what seems like a weekly double-digit hike in…doesn’t it feel like ‘we’re working just for gas now’?  And then how ’bout that whining from one of the more famous multi-millionaires:

“I’m not broke, but I was kind of counting on some of that money to get me through the summer.  Now I’ve got to like work.  But that’s alright.  Work’s good.  Work fuels the soul.” – said the ‘peaceful man with bad intentions’, Charlie Sheen.

Hey Mr. Sheen quit whining like a little butch and get a grip that your gravy train is done.  We’re all trying to get a little work and counting on some motorcycle rally money to get us through the summer.  Although we don’t all roll with a baby-sitter porn-star mistress.   Winning opportunity – Duh?!

Far be it for me to use the troubles of another to further my blog career, but Mr. Wandell doesn’t get a total pass — it was just last September when he stated that Harley-Davidson management had lost control of costs.  The key item he mentioned was employees at the Harley Menomonee Falls Plant were making an average $32 per hour in wages and with benefits added were costing the company $75 per hour.  He then made reference to General Motors – sort of a connect the dots if you can with the media — and the inability to remain profitable under the burden of its payroll, pension and benefits costs.  Many perceived this as whining and some had an “allergic reaction” to the fact that a CEO who makes more than $6M a year was whining about how out of control workers wages have become….was shall we say, less than gripping.  I’m sure if Mr. Wandell could have a “do-over” he’d try and not alienate the workers again.

And speaking of CEO bonuses, they’ve bounced back faster than a Charlie Sheen Google search.  Mr. Wandell might be thinking his $2.3M performance-based cash bonus was rather paltry when compared to: Howard Schultz (CEO, Starbucks) $3.5M; Jeffery Immelt (CEO, GE) $4M; Daniel Ustian (CEO, Navistar) $3.9M; Robert Iger (CEO, Walt Disney) $13.5M?  According to this WSJ report the median cash bonus at 50 major corporations jumped 30.5% in 2010.

A wise man once told me that there’s no “I” in ‘team, but there are two in whining…

Photo courtesy of Harvey Comics.

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Keith Wandell Resignation Letter

The news was expected.

Harley-Davidson CEO Keith Wandell, citing the pressure of obtaining a motorcycle endorsement and regularly commuting with “cagers”, today announced he is retiring at the relative young age of 60.

It’s through my privileged relations with some of the major actors of the motorcycle industry that allow this blog to offer you an exclusive first look of the resignation letter below:

Date: April 1, 2010
To: Harley-Davidson Employees
From: Office of the President and CEO, Mr. Keith Wandell
Subject: A Letter To My Colleagues

This morning I am announcing my intention to retire by the time of our next board meeting.

It has become clear that in light of the continuing leadership doubt, and the unprecedented level of negative attention about my compensation package, the company – and each of you – has had to endure, that the best thing I can do for you, our dealer network and our shareholders is to retire.

Some of you have done an extraordinary job serving our customers despite the almost daily media distraction.  I feel strongly that the attacks about my riding experience and eight month compensation package of $6.4 million are unjustified, but unfortunately, they show no signs of abating. A simple reality check tells me that people are spending more time reading about the acrimony and not enough time buying our motorcycles from the newly reduced product line up.

What matters is not what happens to me, but it’s really about the remaining employees of Harley-Davidson, our employed customers and our shareholders. The whole is greater than the sum of any 2 parts and clearly more important than me “feeling good about where we are” as a company.   Even in the midst of the first quarterly loss in 16 years, the HDFS liquidity freeze, the India expansion, the Buell distractions, the union worker delinquencies in PA., and the MV Augusta sell-off strategy… my main regret in this short, but well paid, tenure, is that I will not be here to realize the potential of this bold strategy to return the company to a “new” normal.

I will retire when my successor is appointed. The Board has begun a high profile and expensive search for a new CEO, led by the head of the Board’s Compensation, Management Development and Succession Committee. I, of course, will do everything I can to assist in this transition. I will make sure that the company firmly “stays the course” until my successor is chosen.

Let me say that it will not be easy for me to leave. I take enormous pride in obtaining my motorcycle endorsement and I’ve met a bunch of new lunch-time riding buddies.  It’s been said that the true test of a leader is the performance of the company he leaves behind. On that score, I feel my short, but well paid legacy and public record are available for all to read.  The Board has asked me to assure you of their full support as we go through the transition and into the future.

To some of you, I offer my heartfelt thanks for the extraordinary opportunity to work with and lead you during this short tenure that I’ve been in Milwaukee. Of course I will continue to see some of you in the H-D Brewers suite and have enormous faith that the best of Harley-Davidson will be lived in the days ahead.

Sincerely,
Keith “Scooter” Wandell
President and CEO, Harley-Davidson

Happy April Fool’s! Enjoy the day even with all the faux news.

Photo is courtesy of H-D.

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Keith E. Wandell, CEO Harley-Davidson

$6.4M to be exact. 

May 1st through the end of 2009 marked eight months on the job for Keith E. Wandell, the CEO of Harley-Davidson Inc., and for that privilege he was delivered a pay package valued at $6.4 million, according to the Associated Press.  

The company ended the fourth quarter with a loss of $218.7 million, its first quarterly loss in 16 years.  In addition, management spearheaded a slashing strategy which included massive employee layoffs, closing of factories, negotiated union concessions under the threat of plant re-location and shuttered or sold unwanted brands.

But, talk about an obsession with fairness!  

The board delivered a pay package to Mr. Wandell with a base salary of $650,025 from his start date and he received a bonus of $780,030 and stock and option awards valued at $4.9 million at the time they were issued.  He also received other compensation worth $22,515, which includes a cash payment of $19,733 instead of perquisites.  In total it was valued at $6.4M.

For those in the job market who survive on high-end discretionary spending by consumers, might take a moment of pause and wonder if Mr. Wandell’s approximately $26,700 per day compensation package is just a bit tad excessive?

True it was during a time that management seemed caught like a deer in the head light as they watched the company’s outbound shipments decrease by more than 25%!  I’m not taking shots at the employees.  These executive compensation issues have been around for a long time, and much of the company performance blame lays right at the feet of management and specifically the previous CEO, Jim Ziemer, who takes the golden parachute award for world-class nonperformance during his last year.  Talk about setting up his predecessor with competitiveness and cost structure issues. 

But, is it an excuse for the CEO to say, ‘Hey, the board gave it to me.’ Or should CEOs be responsible too and provide leadership when compensation packages defy economic logic?!  Mr. Wandell is a very capable executive who chalked up impressive business success.  Yet, significant rewards for great results can still be attacked. Especially if the rewards for CEOs and their teams become extraordinarily high with no link to performance – and shareholders are left holding the bag – then it undermines people’s confidence in the company itself.

What are the results at H-D?  But, it’s only been 8 months you say.  Exactly my point.  The one bit of positive news on H-D that I found is that the daily average on HOG’s stock value has risen about 20% since Mr. Wandell has moved in and taken the helm.  

Photo courtesy of H-D. 

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