European Stars and Stripes (Newspaper) - April 28, 1991, Darmstadt, Hesse                                Sunday april 28, 1991 the stars and stripes Page 13 commentary Ernest b. Furguson pc a a. A a a. A a Quot a Exxon compensation offer does t come close How Nice for Exxon that in the first Quarter of this year its profits were higher than in any Quarter in the company a 109-Ycar history. How Nice for the rest of us that on the same Day the company announced this Good news a judge in Alaska threw out the Deal by which Exxon would have paid a Mere $100 million criminal Fine for the Valdez Oil spill. That amount of Money a simply was not adequate As penalty for the damage done to alaskans Waters Shoreline wildlife and Economy the. Judge said. He gave the company a month to decide whether to try to work out a More suitable figure or take the Case to trial. His decision also Calls into question the separate $1 billion agreement by which the company would Settle outstanding civil suits Over the spill. The timing of Exxon a record profit announcement could not have been better for the Public interest. Any lawyer who successfully pleads corporate poverty under these circumstances will be a cinch for an Academy award. In the first three months of this year Exxon a profits were $2.24 billion up 75 percent Over 1990�?Ts first Quarter. That Means the company could have paid the $100 million criminal and $1 billion civil penalties in Cash and still have chalked up profits of More than $1 billion. At $2.24 billion a Quarter its profit this year would come close to $9 billion. A single years profit seems a minimally reasonable amount to pay for the damage done by the Exxon Valdez for the negligence that let it happen and the Arr Gancic that virtually folded the company a damage control capability beforehand. If any renegotiated bargain puts the total Bill at less than $10 billion it is still a Sweet Deal for Exxon and a raw Deal for the Public especially for taxpayers in Alaska. The judge who threw out the earlier agreement thinks Public opinion demands a More severe penalty. And if the negotiators have any doubt about that there is copious supporting evidence. Americans have Learned through repeated episodes such As the Exxon Valdez spill to give very Little credibility to corporate wailing about environmental controls. Last year for example a Survey by two polling companies one Democrat distributed by King features Syndicate in wow a whole Toto rest / in and one Republican asked More than 1,000 registered voters this question a say there were three research scientists a one from the Federal government one from a major corporation and one from an environmental group a a each expressing a different Point of View about a major environmental Issue. Which person would you be inclined to rely on most a sixty eight percent said the , 15 percent the Federal government and 6 percent the corporation. Sixty six percent thought there was too Little environmental regulation 19 percent that there was about the right amount and Only 9 percent thought there was too much. Industry officials and administration spokesmen for the past decade plus have asserted that the Price of protecting the environment is lost jobs and retarded economic Progress. Asked whether we should be willing to sacrifice environmental Quality for economic growth or vice versa 72 percent said sacrifice growth rather than endanger the environment. The Exxon Valdez spill was exactly the kind of disaster predicted when the Alaska pipeline was first proposed and the narrow Valdez fiord with its Tricky approach was chosen As the terminal. Despite those warnings when no major catastrophe took place in the Early years of the pipelines operation stand by cleanup Crews were let go and equipment was mothballed. That is one of the reasons criminal and civil penalties for that spill should be much higher. Now after Exxon Valdez and despite environmental protests the Industry and the Bush administration Are still pushing for Oil drilling in the Arctic National wildlife Refuge. Mandating More efficient cars would save More Oil than that Field would produce even by Industry a highest estimates. Yet the Industry and the administration continue to oppose better Miles per gallon standards for . Automakers. If this profit driven shortsightedness prevails the result will be other messes like the Exxon Valdez its not a question of whether just of when the judge in Alaska wants to be sure that Tough reasonable penalties Are just As inevitable As disaster. C the Baltimore Sun William f. Buckley  paychecks influenced by politics when George Mcgovern was campaigning for the democratic nomination for president in 1972,  him that the president of the Ford motor. Co. Was receiving $400,000 in compensation that s roughly $1.2 million in current Dollar Sand he fairly exploded. Those were the fairy land Days when Mcgovern was proposing $1,000 As a surtax to be paid by everyone who earned $12,000 a year or More but it was one of the last gasps of calvinist husbandry in National politics the populist notion that to earn a great Deal of Money is a moral theological affront. Curiously it was not the businessmen who broke the taboo it was the Rock stars and the athletes. I remember Back in 1972 instructing candidate Mcgovern that at the rate at which Ford was Selling cars and trucks $400,000 per year meant that the president of Ford was being paid approximately 16 cents for every vehicle sold not Gross really. To put things in perspective it was Back then about. -0 years ago that barbra Streisand declared that she Lviv the highest paid entertainer in the world a charging Mukk per engagement which is about what mrs.1 Hatcher now gets for a lecture. But the last decade f a hugely dislocated the old standards. Cher the weekend one Learned that a football player m in tre Dame just Call me Ismail is being paid by a  football team a sum of Money guaranteed to be no less than $14 million in the next four years. Comes now the cos who run our major corporations and we see if not exactly Star status compensation right up there in the Ballpark with students just out of notre Dame. Time Magazine ran recently an interesting essay a a cos no pain just gain with pictures of the head of . Heinz $38 million in salary and option the head of Walt Disney $11.2 million and the head of Apple $3.2 million. Author Janice Castro makes three Points. The first that cos tend to get paid whatever they ask for if they Are successful and that they tend to Reward the Board of directors by authorizing significant raises in their own compensation. Second that Many salary raises Are not conditioned on better performance by the companies they run. Third that some companies Are shrewdly pegging the bonuses on a company a performance by contrast with Standard amp poor s. If a amp a goes up 10 percent and International goodies Stock goes up 10 percent the president of in  go up 10 percent he should stay the same. _ the reporter does Point out that the big  Germany and Japan get about halt what ours get and often outperform ours. The comment Here one supposes. Is that everything in America is traditionally done in a big Way. Still there is a moral aesthetic Point Here not to be loss sight of. Irving Kristol in his Book Quot iwo cheers Tor capitalism confesses his misgivings at the conduct of some of our most conspicuous corporations. His Point is not a denial of the Market principle which tells you quite simply that if corporation x wishes to lure executive z away from his own company and is willing to pay him $10 million to come Over that is As much a Market decision As Yale a offer to a historian at Johns Hopkins to come on Over to new Haven Lor Hall again As much Money and half the teaching Load. Kristola a Point is that a decision which is apparently two dimensionally a Market decision is three dimensionally something More. It becomes a political decision. Many economic decisions a indeed almost All a Are influenced by ambient political conditions. Ii the corporation tax is increased a political question prices will Rise and demand will diminish. If tariffs Are imposed prices will Rise imports diminish and exports almost certainly diminish. The mood of the electorate is influenced by conspicuous consumption and by ostentatiously exaggerated compensation and this is something that should influence the deliberations not Only of directors when Decidirio on compensation but of cos smart enough to. Have some idea of when a Mcgovern Down the line will make a More convincing Case Tor higher taxation and steeper progressive rates. It does t matter that his a Cumens Are rational. Who Evcic said that c on Giess is moved by rational argument. Cd Uii Veu ii fre As Syndicate