
By Peter Faur
Ed Whitacre has been one of the country's most visible CEOs for more than 20 years. As chairman of Southwestern Bell Corp. - which he renamed SBC Corp. - he put Humpty Dumpty back together again, using the hospitable regulatory environment of the 1990s and 2000s to reassemble the regional Bell operating companies that had been split apart during the1980s by a federal consent decree. As the icing on the cake, he renamed his company a second time, reclaiming the venerable AT&T name used by one of his last acquisitions. AT&T, of course, was the company from which SBC (and Whitacre) had been spun off in 1984.
The tall, legendary Texan retired in 2007, taking a $158 million payout with him. He kept himself busy by sitting on ExxonMobil's board and serving as a$1-million-a-year consultant to the company he rebuilt, AT&T. Then last year, President Obama asked him to become the chairman of General Motors, hoping that Whitacre could reinvigorate another cherished American institution. Before long, Whitacre forced the resignation of GM CEO Fritz Henderson and, after a short search for a successor, took the job himself.
It turns out that, in addition to the $158 million payout he received from AT&T, Whitacre also negotiated other benefits, including a lifetime claim to 20 hours a month on AT&T jets for his personal use. This arrangement has been in the fine print of AT&T's public documents since it was negotiated, but it's coming to light now that Whitacre allegedly is using his AT&T jet time to commute between San Antonio and Detroit. You can learn more from this article in the
Detroit News.Sixty percent of GM is owned by the U.S. government,which stipulated as part of its rescue that the automaker had to sell its fleet of seven jets. So Whitacre, who is used to traveling at will on Gulfstreams and similar aircraft, appears to be using his AT&T jet time to fly into and out of the Motor City.
Are you outraged? I'm not, at least not at Ed Whitacre. He negotiated his deal with AT&T fairly and squarely. He's not using his air time to head to parties in Cabo; instead, he's commuting to Detroit to try to salvage a once-great American company.
AT&T's board of directors didn't have to authorize Air Whitacre, but it did. It seems to be an unnecessary gift to a man who could easily pay for charter flights for himself. But if you or I had a similar deal, we'd take advantage of it. You can't blame Whitacre for doing so.
If shareholders are upset by the arrangement, they should voice their disapproval. If the board continues to act contrary to shareholders' wishes, it can and should be ousted at the ballot box. That probably won't happen. If it doesn't, shareholders have no one to blame but themselves.
What do you think?
Grammar tip: The letters "ATM" stand for "automated teller machine." Saying that you're going to the ATM machine is, therefore, redundant. Just say you're going to the ATM.
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