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Eisner: A Fair Day's Pay For A Fair Haired Boy?

Readers Report


"How high can CEO pay go?" (Special Report, Apr. 22) unfairly characterized Walt Disney CEO Michael D. Eisner's compensation as out of proportion to shareholder value. Unfortunately, this evaluation was presented in a narrow context that misrepresents the dramatic benefits Eisner has brought stockholders since he took over.

Eisner's compensation package was largely designed at a time when the company was in a shambles and investors unenthusiastic. Eisner has been paid handsomely over the years only because he transformed Disney from a stagnant company on the verge of being raided in 1984 into a premier entertainment Goliath with 10 times the revenue and enough power to take over Capital Cities/ABC Inc. in the nation's second-largest acquisition. Disney's renaissance under Eisner has been remarkable even by exacting Wall Street standards, and the stock has seen a steady, above-market rise in value.

Placing such a heavy emphasis on annual returns is the kind of shortsightedness that is a problem with American business as a whole. What a CEO does in the long term to expand assets, enlarge dividends, and increase market share should be the more important measure. On this basis, Michael Eisner has earned his compensation.

David Verbraska

Latham, N.Y.Return to top


In your multipage, multiarticle report, the writers did a marvelous job of explaining the possible and probable advantages and disadvantages of telecommunications deregulation ("Telecom's new age," Special Report, Apr. 8). We all know that healthy competition is good for business and growth. You provide a great deal of insight into the dealings of the giants and the Baby Bells.

No mention is made, however, of those of us who live and do business in the small towns and rural areas where communications "service" is provided by local, independent phone companies--where we still have some party lines and where those who have private lines outside town still pay cable mileage charges, where "updating" the central exchange equipment to "state-of-the-art" means replacing step-by-step switching with electronic call-director equipment such as has been in use in large office buildings in the cities for years. When can we "out-backers" expect to see some benefits from the so-called I-way/communications revolution?

Joe B. Montgomery


JBM International

Pineville, Mo.Return to top


"Doing business with strongmen" (International Business, Apr. 22) reports that major American companies are lobbying the U.S. government to protect their investments in China. Most business people accept that leaders of corporations have a responsibility to their shareholders to earn profits. If that includes lobbying on behalf of a brutal, totalitarian dictatorship ruled by a corrupt oligarchy and its thugs, so be it. However, shareholders should be asking whether the potential returns really justify the risks--including not only operating in a lawless environment but also sullying the corporate name by doing the bidding of tyrants.

Joe Morrison

Princeton, N.J.Return to top


I can't imagine how your reporter came to the conclusion that Software Artistry was "struggling" ("New tricks for help lines," Information Processing, Apr. 29). Our 1995 revenues show us to be the second-largest vendor in the help-desk industry. Topline growth between 1994 and 1995 was 75%, and earnings-per-share growth was 89%. We have had 19% operating margins for three consecutive years. One-fourth of the 100 largest companies use our products, and we are considered a leader in the marketplace by industry analysts. I don't call that struggling: I call that a success story.

W. Scott Webber

President and CEO

Software Artistry

IndianapolisReturn to top

Reviving Keynes
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