Striking Out
General Motors last week disclosed that embattled Chairman Robert C. Stempel’s paycheck was slashed 31% in 1991 to a mere $1 million, the price paid for a $4.5-billion annual loss.
It’s obvious that the money these days isn’t in making cars. It’s in Major League Baseball, where Stempel’s pay would be grounds for a spring training holdout. Consider:
* His pay is lower than the average salary on 18 of 26 teams.
* About 40% of the players make at least as much as Stempel does.
* Bobby Bonilla of the New York Mets and Danny Tartabull of the New York Yankees earn more than the combined 1991 pay for Big Three auto executives Stempel, Harold A. Poling of Ford and Chrysler’s Lee A. Iacocca.
Chicago Cub star Ryne Sandberg’s $7.1-million-a-year salary, which kicks in next year, is 40% higher than what the Big Three executives made.
No Oscar for This Bank
The group of Hollywood insiders who invested in National Mercantile Bancorp in Century City back in 1990 quickly discovered that the bank was a rocky investment because of bad loans. Turns out it also was something of a politically incorrect investment as well.
A report just made public by federal bank regulators shows that the company’s Mercantile National Bank unit was in “substantial noncompliance” with the Community Reinvestment Act, a law designed to prod banks into lending to low-income and minority customers.
The rating is the worst possible one regulators give. Mercantile was one of only six banks out of 789 nationwide reviewed last year to receive such a poor rating. In a sharply worded report, regulators said the bank “exhibits little initiative” in complying with the act.
The Hollywood investors--who bought nearly 20% of the bank’s stock and have always portrayed it as a hands-off investment--include a partnership affiliated with the influential Creative Artists Agency. Previous public filings have listed as investors a batch of celebrities, including Jane Fonda, Ted Danson, Richard Dreyfuss, Prince, Tina Turner and Robert Duvall.
Bank spokeswoman Cecilia Wilkinson says new Chief Executive Donald D. Thornburg has made complying with the act a priority, putting into place new policies that should satisfy regulators.
“He feels there was no reason for something this important, and this easy to implement, not to have been addressed,” she says.
Preparing for the Worst
It’s annual meeting time, and to prepare executives to field questions on what could be uncomfortable subjects--like executive pay--Ernst & Young is sending out a booklet on what to expect. Potential questions include:
* What perquisites are available?
* Have any illegal acts taken place?
* Do all the directors review and personally sign the Form 10-K financial report filed annually with the Securities and Exchange Commission?
* And, presumably for those who can’t make the meeting, is there going to be a videotape of the meeting available?
Briefly . . .
The Overpriced Stock Service newsletter calls American Airlines’ much-publicized overhaul of its fare system an attempt to “force sane pricing on an insane industry.” . . . Not necessarily by choice: The French-owned Credit Lyonnais bank, which last week started foreclosing on most of the MGM studio’s stock--a move stemming from MGM’s disastrous relationship with financier Giancarlo Parretti--publishes a booklet titled “Credit Lyonnais in the USA: A Growing Presence in the American Market.” . . . Attention Shirley MacLaine: The newsletter “Packaged Facts” says “New Age beverages” made a comeback last year as sales of flavored waters, juice sparklers and gourmet sodas grew 13%, an improvement from the sluggish 8% of 1990.
