Six Million Dollar Man

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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What Harley-Davidson Exec’s Want For Christmas

Santa wasn’t good to the motorcycle industry in 2009.  A weak economy, company layoffs, a housing melt-down, credit freeze, higher manufacturing costs and an ever discriminating consumer to boot.  As Harley-Davidson executives ponder over what happen this year, I can’t help but believe there are some major things on their wish lists to Santa.  So I’ve taken a scientific (parody alert!) guess of what some of H-D’s top executives want for Christmas:

Keith Wandell, CEO, Harley-Davidson: I got the head honcho job with the industry’s most iconic motorcycle manufacture in history, that has a cult-like following, with vendors tripping all over themselves to copy what we’ve done and I didn’t even have a motorcycle endorsement. I can’t think of anything more to ask for.  Oh wait, all those government stimulus funds – listen up Santa, I’ve been to the White House twice for dinner.  Have I not been nice enough?  Please let the spinner land on my project.

Mark-Hans Richer, Sr. VP & Chief Marketing Officer:  What the ho?  Please, Santa send us Tiger Woods!  As the leader of the world’s foremost authority on brand marketing, our team of cutting edge hoo-ha marketers developed a new strategy with Tiger as the spokesperson!  It’s set to appeal to the outlaw in every man.  We plan to dump that “ludicrous” campaign in favor of “Night of the Tiger”…complete with an exclusive Elin ghost flame paint scheme…

Bill Davidson, VP Core Customer Marketing: Please Santa let 2010 be the year for H-D in professional motorcycle racing.  Nothing but wins – in the dirt or drag or NHRA Pro – whatever it says on my t-shirt. Wait, can you also help people forget about that botched firing of Anne Paluso.  Really our plan is to go racing – go “team scream” or something like that.

John Olin, CFO: Motorcycle sales!  Santa it’s not my fault.  Please let me milk this “new in my job” for just a while longer.  What do they expect?  Miracles on Juneau Avenue!  Doesn’t it matter that I’ve been here less time than Keith?  I do have a motorcycle endorsement.  And, my calculator is newer than Lawrence’s!

Matthew Levatich, President & COO: Santa please get the Wisconsin Department of Transportation to approve and recognize my heroic role in getting the special license plate commemorating Harley-Davidson through the political red-tape as the state’s official motorcycle.   Yep, 2010 is shaping up to be a good performance review!  Memo to Enrico… get the bottle of Chianti ready!

Lawrence Hund, President & COO of H-D Finance: A new platinum edition HP 12C calculator.  The minus button on my last one quit working.

Gail Lione, EVP & General Counsel: Santa please tell us who is behind that NWHOG?!  Send us that macrant email address.  We have an important legal document gift we wish to serve send over to Northwest Harley Blog.

Paul James, Harley-Davidson Company Spokesperson: Please let me graduate the training class called “If the dream is big enough, the facts don’t matter” — a.k.a. the Mohammed Saeed al-Sahhaf school of bubbling optimism to distract the media and bloggers with superfluous BS so they ignore our fundamental problems.

James McCaslin, EVP Corporate Product Planning:  Santa can you get me a copy of Keith’s industry information?  I’ve never heard of “vendors tripping all over themselves to copy what we’ve done?”  I do remember a blogger at the 105th Anniversary trying to take a photo of a plant tour and we ran his butt right out the building before he was able to take pictures of the lunch room.

Karl Eberle, Sr. VP Manufacturing: Please make Indian go away. We are tired of being embarrassed in our own back yard when it comes to American cruisers and we don’t want that company bragging about their superior performance anymore.

Enrico D’Onofrio, Managing Director – MV Augusta: I already got what I wanted. Thanks for the early Christmas present H-D!  That sale notification surprised Wall Street… as you say in your home land… my golden shute is priceless. All this talk about motorcycles when the grape reigns supreme here in the zone of Tuscany… please pass the Chianti.

Jon R. Flickinger, President & COO of Buell: A job!  Also could you unload some of those dusty Buell’s in the warehouse?  My exit bonus is on the line.

Thanks for your readership during this past year. You may not have agreed with what I had to say at times, but it made for some lively discussions nevertheless. Merry Christmas, happy holidays and best wishes to you in 2010.

Photo courtesy of Flickr.

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