Word: araskog
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...shares. Under the plan, investors would receive one share in each of the three new companies for every share they now own. "We are convinced that this action will increase immediately and over time the value of the investment of ITT's shareholders," said company chairman and CEO Rand Araskog. On Wall Street, the share price for the American conglomerate rose $6.25 to close...
Annoyed, shareholders have moved to curb such abuses -- just as they have moved to remove a number of CEOs in recent months. Under pressure from big institutional investors, for example, ITT Corp. drastically altered the stock- option plan for its chairman, Rand Araskog. He had received an outright stock gift with no strings attached. The company replaced the grant with a ^ plan based on performance. AT&T also upped the ante for its CEO, Robert Allen. Allen was once awarded 45,000 shares just for staying on the job. Now, he will receive 250,000 shares, but only...
...Rand Araskog, whose $7 million in 1990 compensation touched off a maelstrom, agreed to a dramatic overhaul of his pay package. The company replaced outright stock grants with options based on the performance of the company's stock, and Araskog agreed to reduce the size of his annual bonus. Says Hanson: "Shareholders are waking up to the fact that they're owners and not just investors...
...replied in a three-page statement that lauded the company's performance since Araskog became chief executive. He "has literally caused ITT to be transformed over the past decade," the document says. Among other things, Araskog made ITT far less unwieldy by selling off more than 200 of its 275 subsidiaries. He also helped raise the value of the company's stock by spending nearly $2 billion to buy back shares. As a result, the statement says, Araskog's compensation "is at a level which is believed appropriate for bringing to ITT the benefits which have come to the corporation...
...overwhelming margin? That seems unlikely this year. But the Calpers-led protest could be picking up support. Neuberger & Berman, a Manhattan firm that manages more ITT stock than any other institution -- 2 million shares -- is not happy. Wrote Neuberger portfolio manager Marvin Schwartz in a letter to Araskog: "One cannot escape noting that ITT stock has been an extremely dismal performer in the marketplace over the past 11-year period." That sorry record, Schwartz declared, "suggests that knowledgeable institutional investors do not think very highly of either the company or its prospects...