Word: araskog
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Talk about chutzpah. Did ITT chairman Rand Araskog deserve the 103% raise that jacked his pay up to $11.4 million last year and made him one of America's best-paid executives, even though his company's profits rose just 4%? No way, say furious investors led by the California Public Employees' Retirement System, the largest U.S. pension fund. Calpers, which holds 1.15 million shares of ITT stock, or about 1%, is so steamed over Araskog's raise that it has threatened to vote to oust the company's directors at the annual meeting next week...
...Dale Hanson: "ITT is not one of the companies that bubble to the top when you think of performance." That's putting it mildly. According to Graef S. Crystal, a professor at the Haas Business School at the University of California, Berkeley, ITT's total return to shareholders during Araskog's 12- year tenure has been in the bottom 30% of America's 406 largest companies. Yet over the same period, he notes, Araskog's compensation has rocketed from a level that was 87 times as great as a blue-collar worker's to one that is more than...
...million in salary and stock in 1989, more than three times the average for CEOs of the 200 largest U.S. firms (his 1990 compensation: $11.2 million). His board members earned $75,000 in cash and benefits, a solid 70% above the $44,000 average. At ITT, chairman Rand Araskog earned $6.4 million in 1989, more than twice the average (his 1990 pay was $11.1 million), while his directors were paid...
...takeover sharks, who are likely to chop far more brutally and indiscriminately than the present managements. No less a titan than ITT warily shook off a takeover bid by Raider Irwin Jacobs in 1985. That effort gave renewed impetus to a slimming exercise already begun by ITT Chairman Rand Araskog. Since 1980, Araskog has sold off more than 100 businesses, and last year he cut ITT's work force by 100,000, or 44%, and slashed headquarters staff from about 850 to 350. Says Araskog: "Corporate executives have to learn to do things for themselves. Pick up the telephone...
...Araskog has good reason to want to shed much of the ITT communications network, particularly System 12, a computerized switching board that telephone companies use to route calls. The unit, which cost $1 billion to develop, sold well after it was unveiled in Europe in 1979, but it has turned a profit only in West Germany and Italy. Araskog thought that if he could adapt System 12 to U.S. standards, he could sell it to the regional Bell companies, which were formed after the AT&T breakup in 1984. But ITT was unable to write software that would mesh System...