Bollettino

Yesterday, in Britain, GlaxoSmithKline shareholders actually voted down the compensation package for
its directors. The package was rather notorious even before the vote. Here's a BBC description of it:

"GSK shares, for instance, have lost about one-third of their value in the three and a half years since chief executive Jean Pierre Garnier took over, amid concerns that the firm has failed to develop new best-selling drugs. This poor track record steeled investor opposition to a pay deal which would have given Mr Garnier a pay-off of up to �22m ($35.7m) if he was dismissed."

The Guardian has a fuller story and the background.


"The stage had been set for a rebellion at GSK after the Association of British Insurers (ABI), which represents the big insurance companies and which controls about 25% of the stock market, marked the company's remuneration policy as a so-called "red top" - a rarely used indicator intended to show serious concern to its members. The National Association of Pension Funds had advised its members to abstain."

Garnier, of course, is a privileged loser, one of those new generation of CEO-Pigs who use corporations as convenient troughs to root in:

"The row was not so much about the �5m Mr Garnier earned last year but more about the �22m he stands to receive if he loses his job. The French-born chief executive told the meeting he hoped never to receive the pay-off. He repeatedly defended his decision to live in Philadelphia rather than the UK, where GSK is based."

In a more colorful Guardian report about the meeting, it appears that Garnier's ordeal was personal and devestating. Shareholder after shareholder stood up and denounced the board, and the pay committee (made up as they all are of wheezing, greased CEOs of other companies, always willing to help each other out). We particularly liked this episode:

"One referred to a comment Mr Garnier once made that "if you pay peanuts, you get monkeys," waving a bag of peanuts and accusing the chief executive of not deserving his salary.

Mr Garnier opened the meeting by giving an upbeat slide presentation of Glaxo's corporate performance, showing pharmaceutical sales up 9% and trading profits up 23% in the first quarter; but much of the discussion in the hall was focused on the terms of his contract, instead of the performance of the company."

Over at BusinessWeek, there is another article about union activism to attack CEO pay packages:

"Delta Air Lines (DAL ) pilot Michael H. Messmore was incensed at the $28 million golden parachute handed to former Delta Chief Executive Ronald W. Allen when he resigned in 1997. To stop such excesses, Messmore, with the backing of the Air Line Pilots Assn., submitted a proxy resolution in 2000 demanding shareholder approval of such deals. The initiative was rejected three years in a row. But at Delta's annual meeting on Apr. 25, widespread shareholder anger over revelations of bankruptcy-proof retirement packages for current executives put Messmore's resolution over the top, with a 54% majority. Another pilot-sponsored proposal calling for the cost of stock options to be deducted from earnings racked up a 60% majority. "Executive compensation is out of whack," says Messmore."

Of course, BW asks the 22 million pound question:

"But will companies get the message? Shareholder resolutions, after all, aren't binding, leaving management free to ignore them. Still, the current spate of shareholder votes is likely to spur a fair amount of reform. For example, both companies that lost proxy battles over executive pay last year, Bank of America (BAC ) and Norfolk Southern (NSC ) Corp., eventually adopted the measures. "Everyone's a lot more sensitive to majority votes now," says Rosanna Landis Weaver, an analyst at the Investor Responsibility Research Center in Washington."

The use of shareholders, here, reminds us of the early days of the consumer movement, when acquiring stock in a company was preliminary, for consumer advocates, to attending shareholder meetings and criticizing the company. This often worked. However, with repeated use, companies built up an immunity to criticism. Right now, this is the best weapon to cut CEO pay down to a reasonable size, but the real answer is making top executive positions competitive. Contrary to Garnier, there are probably thousands of executives of his calibre who would even be willing to live in Britain to take the reins of GSK. The first step in making a competitive environment is ceasing to disguise the effect of outrageous compensation packages on companies. A nice instance is coming up: the union pension fund holding shares of PeopleSoft have introduced a resolution to expense stock options. The CEO of PeopleSoft, Craig Conway, is your standard issue pay porker. Here's what he said:

"Employee stock options have no economic impact on a company," PeopleSoft CEO Craig Conway said in his letter to shareholders, filed Monday as an amendment to the company's proxy."

Later on in the article, we get another, gentle reminder that economic impact, for Craig Conway, is a strange thing indeed:

"PeopleSoft, one of Silicon Valley's heavier users of employee stock options, said in a recent filing that it would have had a 2002 loss of $403,000 rather than its reported profit of $38.5 million, if it had used the fair-market method to expense employee share options."

And of course the inevitable piano drops on our head:

"Stock options make up a large portion of PeopleSoft's compensation to top executives, AFSCME said in PeopleSoft's proxy filed April 28. In 2001, Conway's cash compensation totaled $3.3 million, while the value of options he was awarded was between $13.2 million and $33.4 million, depending on the return assumption used."

So, what do we have here? We have a man who is in charge of a national company who has the balls to tell us that the cost of paying for employees has no economic effect on the company. This is a little bit like an airplane executive who doesn't understand gravity. Here's a brief from TheStreet about the oily Conway:


"Then there was PeopleSoft (PSFT:Nasdaq - news - commentary - research - analysis) CEO Craig Conway. While stock in his company dropped 53% in 2002, his compensation soared, largely on the strength of a $14.6 million restricted stock award. Conway's salary stayed flat at $1 million, his bonus dropped from $2.32 million to $1.92 million and he was granted 4.1 million options, compared to 1 million options the year before. I"In a Securities and Exchange Commission filing, PeopleSoft's compensation committee praised Conway's "outstanding" performance as a leader, cited the company's overall performance and said it considered equity grants made to CEOs of other similarly sized companies. Asked about Conway's compensation, the company said it had nothing to add to the information contained in the filing."


The outstanding independence of the compensation committee -- can't you just feel it? Which consists, by the way, of the CEO of Rite-Read, who paid himself a million six in 2001, the CEO of AskJeeves, and the CEO of Symyx Technologies, who paid himself only 478 K in 2002, when company revenues and earnings dropped precipitantly, but who supplemented his meager income by exercizing options for an equal amount last year.

Bollettino

Ah, the weekend. Suicide bombing is the new bungee cord jumping sport throughout the Middle East, the dollar is quietly plummetting in the background as the Bush administration, which argues that its tax cut will raise stock prices, shows that it could care less, and the Private Jessica Lynch rescue turns out to have been a little less dangerous than your average frat party.

Where to begin?

LI talked to D. -- okay, I talked to my brother yesterday, and he was full of outrage about the faking of the taking of Jessica Lynch, pfc. Since the networks were full of her story two weeks ago and she has been figuring heavily in the national press, we expected a story about the BBC report in the NYT or the Washington Post. So far, we haven't seen one. Since much of the rightwing blog community, leaking into much of the rightwing communitiy, is always on guard against media manipulation, we decided to visit spots we usually touch on very gingerly. There is a general blogger indignation that the BBC is putting out anti-American propaganda, since 1. The BBC claim blanks were used for the filming, and soldiers wouldn't have agreed to use blanks; and 2. blank ammunition has a different profile than real ammunition, and usually requires a modified weapon to fire it -- and, to quote a source I've avoided on this site,

So how do blank rounds work in the movies? Well, the weapons used are not real. They are specially produced replicas, often based on the mechanism of a real weapon, with the barrel partially sealed. They cannot fire live ammunition under any circumstances whatsoever. This is how film makers create realistic scenes of automatic firing without attaching a BFA to the end of the weapon.Clearly, no one will be carrying that sort of a �weapon� into a combat area.

The tone, here, is very interesting. It assumes that the American Military is always honest; would never risk troops for a stunt, and that the only reason a story claiming it was a stunt could possibly be aired is that any deviation from the Gospel version of the War must be motivated by malice.

This shows a certain shift in the way the Military is considered, at least in this sub-culture. It is a shift that is, perhaps, facilitated by the evident lack of acquaintance with the military. Having a volunteer army, which I think is a mark of civilization (rather like abolishing the death penalty) comes with its disadvantages, one of which is that military matters become subject to romantic illusion. The Military has not been particularly reticent to express its view that the truth is merely one strategy in the process of achieving victory. Stunts are pretty much the m.o. of American intelligence. Who would dare to broadcast entirely fake news of a mercenary army on the march to the capital in order to unseat a government? The CIA, in Guatamala, in 1956. This became a standard trope in CIA lore, and one bragged about, discretely, by the Company. In fact, if you hypothosize that the Lynch rescue was faked, would it have military value? Of course. It did. It was a morale builder. It is interesting that the war cannot, however, have fake moments in it for its most ardent fans. It is as if a bunch of wrestling aficianados were appalled to learn that some of the jumps from the ropes were practiced.

It is surprising how little is being made of the Lynch assertions, but we think that the NYT and the Washington Post are being particularly careful not to offend their thin-skinned American readers about their cherished stories. As Jack N. says, however, the Truth? You can't take the truth!
The military motto of our time.

Bollettino

Why is it that we don't like James Wood?

He is to fiction criticism in America what Danto is to art criticism, and what Anthony Lane is becoming to film criticism. One knows that he will be wise about contexts, and his dips into the novel he is reviewing will be, if not typical of the book, at least well chosen enough to make his version of the book plausible. But his grand enthusiasm for Saul Bellow seems, frankly, incredible -- he has never written about Bellow in such a way that I would want to read Bellow -- and his grand aversion for Don Delillo seems incredible -- he has never conveyed his allergy to Delillo in such a way that I would want to avoid Delillo -- and on the greats he seems to aim at that tone mixing just a hint of pop memory and desire -- of that great child's desire to go through the book, to eat it up -- that Trilling could sometimes bring off so that his reading actually haunts the writer. It takes some time to read Babel, for instance, after Trilling, because Trilling has interposed his own Babel so strongly, so carnally, between oneself and the stories. 



Wood does a reading of James' high period novels -- The Spoils of Poynton, What Maisie Knew, The Awkward Age -- for the Atlantic. Of these, he only finds What Maisie Knew great. He says little about the Awkward Age. We think he is right about Maise, but very wrong about the Spoils. Awkward Age is not great, but it is very fast, and very enjoyable.



Wood does bring out how much What Maisie Knew depends upon knowing -- and how knowing attaches in unexpected ways to the knower. And he also sees how James is dealing the scene painter -- the laborious Zolas, immersed in the rotten fruit of Les Halles -- a deadly blow by doing much with a minimum of brushwork. For Wood, this is a grievous thing -- he's often expressed his nostalgia for the great 19th century novels, and he still believes that the Tolstoyan standard is the right one for fiction, underneath it all. This isn't an impossible belief -- James was the engineer of the too ready conciliation between fiction and its medium, reading, where you don't really see what you see, but we all know this can have terrible consequences, just like the too visual penchant of film that abuts in the dumb action movie, where all contradictions of character are resolved by contemptuously speeding past them, as though the viewer who expects intelligence to pervade the spectacle were being a gull, an utterly pre-MTV anachronism. This is just stripping our narrative sense, and it doesn't take Adorno to figure out just how compliant such an aesthetic must be with the most reactionary politics.



But we digress. Spoils of Poynton is a little gem in the James oeuvre.

Here is what Wood thinks: "The Spoils of Poynton, a work of real penetration, is marred, I think, by an inadequate sense of the motivations of its heroine, Fleda Vetch."



Wood spells out what he means by this, after canningly canning the plot:



"Fleda, a young woman of considerable insight and intellect, is the new friend of Mrs. Gereth, the owner of Poynton. James got the idea for this novel�what he habitually called the donn�e�at a dinner party; he dined out frequently and used these evenings to truffle for rich stories. His neighbor at the table had told him about a "small and ugly matter" in which a Scottish widow was suing her son over the fine furniture he had inherited, which she would not let him have. Mrs. Gereth, like the Scottish widow, has become embroiled in a struggle with her son, Owen, who is about to marry the vulgar, nouveau riche Mona Brigstock. Under English law, once Owen marries, he and his wife will become master and mistress of Poynton."


"In general, James's characters divide into gentle but weak men; formidable and finally monstrous manipulators (mostly women, but sometimes men); and those whose innocence needs to be protected (sometimes young women, sometimes young men, sometimes children). Mrs. Gereth is one of the manipulators, like Madame Merle in The Portrait of a Lady and Aunt Maud in The Wings of the Dove. She cannot bear the idea of the brash Mona in charge of her beautiful objets, and determines to act. Her weapon�at first unwitting, and then unwilling�will be young Fleda, whom she takes under her wing. Mrs. Gereth becomes excited when she hears that Owen and Mona have not yet agreed on a date for the wedding, and assumes that something is amiss with this detestable union. She sees that Fleda is attracted to her son, and soon hears that Owen returns the attraction. She decides to use Fleda as a wedge..."



Now, at this point a New Historicist would remember that women in England had only recently had their property rights given equal, or at least less equal, parity with men. Wood can't see why Fleda would find Mrs. Gereth ultimately a person whose fight for her place was worth, if not sympathy, at least pity; and then he cannot see why she would betray her.

We think that Fleda's resolutions are coherent. Fleda is overwhelmed at first by Mrs. Gereth, who, while being a manipulator, is not like Madame Merle. Merle is in love with a man, Mrs. Gereth in love with a position and a life. Her own life. Manipulation arises, in both cases, out of what both characters want, but Mrs. Gereth is a much less evil character. She does not operate against what she thinks would be Fleda's interests; she simply thinks those interests are a tepid version of her own.

Here is Mrs. Gereth getting down to brass tacks with Fleda:

Why, Fleda, it isn�t a crime, don�t you know that?� cried the delighted woman. �When I was a girl I was always in love, and not always with such nice people as Owen. I didn�t behave as well as you; compared with you I think I must have been odious. But if you�re proud and reserved it�s your own affair; I�m proud too, though I�m not reserved � that�s what spoils it."

Bollettino

We recently expressed a wish to see to what baroque tergiversations Hitchens would be forced in justifying the usurpation of power in Iraq by one of Henry the K's minions -- since Hitchens credibility is wrapped up in being anti Henry the K. This isn't mere ideology, it is his bread and butter -- it allows a news organization to present him as a man of the left as he spouts reactionary slogans, making it seem as if we are getting that magic thing, balance, and making Hitchens an irresistable sell. Well, he hasn't gotten to it yet, but he does have a hilarious column about Chalabi, his bud, in Slate. He goes to the very bottom of the barrel in this one: in supporting his friend, he even becomes (gasp!) modest about his own abilities. Those abilities have to do with understanding bank fraud. Pauvre H. apparently finds it a matter of some difficulty, not just for himself but for all of humanity (hence, the modesty is transitory). This is truly creamy stuff:

"Yet every journalist feels compelled to state, as a matter of record, that Ahmad Chalabi was once convicted (by a very bizarre special court in the kingdom of Jordan) of embezzling money from a bank that was partly controlled by Iraq. I am not an accountant, and I admit that I don't know what happened at the Bank of Petra in 1972. I am not sure, after exhaustive inquiries, that I know anybody who really does know. But I do know what happened at the Iraqi Central Bank a few weeks ago, and I don't have to be an accountant or auditor to understand it. As with everything else, it is the sheer ruthless criminality of the ancien r�gime that staggers the mind and makes some people flinch and change the subject."

Welll, if he knows what happened there, do tell -- there are at least a dozen versions of the story, some of which have Uday piling billions of dollars into trucks, and some of which don't.

We do like the phrase, "exhaustive inquiries." Ah, he searched the Net one night. As always, when Hitchens practices to deceive, he is so clumsy that one feels he might as well not. Apparently his exhaustive inquiries never took him in the direction of the LA Times for May 10th, where he could have found partial solace for his learned ignorance in re: Chalabi.

The man is a hoot.

Bollettino

In a previous post, I recommended checking out the New Yorker profile of Zizek. In this season's Critical Inquiry there's a heated joust between Zizeck and Harpham. I must admit, as is often the case, I only read one side: Zizek's defense of himself as, to quote Harpham, a "symptom." In the course of doing so, he quotes this beautiful line from Deleuze, which is especially apropos at this moment:

�There�s no democratic state that�s not compromised to the very core by its part in generating human misery.�

We would almost like to make that a motto, but it would be unfair to the serpentine weight of the phrase -- serpentine because the weight of it is redistributed in unexpected ways as one repeats it.

However, in keeping with one version of the phrase, let's talk kingship.

It seems that the Pentagon mini-Metterniches are lusting to do for the rightful heir to the Peacock throne -- that's right, his solemnity, Prince Reza Pahlavi -- what they have done, so abundantly, for Ahmad Chalabi -- provide him with a little uniform, a little stipend, and a cohort of blackshirts.

Well, since we are lusting to restore ancient kingdoms, why don't we act on an abuse that we can cure right here at home? I mean the unlawful annexation of Hawaii, of course. LI is presently engaged in writing a review of Van Tilburg's biography of Katherine Routledge, the Easter Island anthropologist, so we've been interested in all things 19th century and Polynesian. There's a nice article about the downfall of the Hawaiian kingdom in Counter Punch.

And there is an Hawaiian independence movement. It has a nice collection of articles about the abuse to which Hawaii has been subject since the wily Yankees illegally annexed the place, way back in the 1890s. As Robert Louis Stevenson put it long ago, in the South Sea Letters, speaking of a native Hawaiian who was marooned by his captain in the Marquesas (back in the old whaling days, Captains often marooned crew members in order not to pay them), and had petered out in Samoa, longing for home: "I wonder what he would think if he could be carried there indeed, and see the modern town of Honolulu brisk with traffic, and the palace with its guards, and the great hotel, and Mr. Berger's band with their unifroms and outlandish instruments; or what he would think to see the brown faces grown so few and the whtie so many; and this father's land sold fro planting sugar, and his father's house quite perished, or perhaps the last of them struck leprous and immured between the surf and the cliffs on Molokai. So simply, even in the South Sea islands, and so sadly, the changes come."

Bollettino

Interestingly enough, this is the second week of non-news about why, exactly, the Pentagon has to rent its Iraqi exile group from SAIC. The lack of curiosity in the media is understandable -- after all, a NYT reporter might have plagiarized a story about the DC sniper and even made up some details while sipping lattes on the East Side, and a fertilizer salesman might have cut up and eaten his wife in California -- or something like that. Much more riveting...

However, indefatiguable LI has managed to sift out some interesting SAIC stuff -- most notably the notorious and now extinguished partnership between SAIC and Venezuala's state owned Petroleum company -- which, as you will remember, was the leader in the strike/coup/whatever it was against Chavez last year. There are a lot of Venezualan commentators who believe that the synergy between PDVSA and SAIC was like that between Lucifer and others of the fallen angel hosts. SAIC no longer features their partnership with PDVSA on their website. However, Americas magazine does mention SAIC in an article about the strike that concludes:



"The Uruguayan weekly Brecha reports that PDVSA�s computer systems are under the control of a joint venture that includes a U.S.-based multinational with strong ties to the U.S. military and the CIA. Intesa, which handles PDVSA�s data processing, is a joint venture set up in 1999 between PDVSA and Science Applications International Corporation (SAIC), whose $2 billion annual income comes mostly from contracts with U.S. military and intelligence agencies. SAIC�s directors and administrators include former defense secretaries William Perry and Melvin Laird; former central intelligence directors John Deutch and Robert Gates; and former National Security Agency (NSA) director Adm. Bobby Ray Inman."

However, those touchy Latin Americans are always so suspicious of American can-do. Why should Iraqis hold any such suspicions about our evident good intentions?

Notes from former colonial ventures

There's a delightful anecdote in Lytton Strachey's Eminent Victorians concerning 'Chinese" Gordon. Gordon was named governor of the Sudan by the Egypt's ruler, who had become so enmeshed in English debts and advice that he was slowly ceding the country to English rule. Now Gordon, like many a good Defense Department undersecretary in our own time, was a pious man. In fact, he was an eccentrically pious man, who read the Bible constantly, looking a little too aggressively for God's personal messages to him to be quite compos mentis in the opinion of his colleagues. Piety and narcissism are so often mirror images of one another. In any case, here's Strachey's account of Gordon's first intimation of the lay of the land in Sudan:


"He took over his new duties early in 1874, and it was not long
before he had a first hint of disillusionment. On his way up the
Nile, he was received in state at Khartoum by the Egyptian
Governor-- General of the Sudan, his immediate official superior.

The function ended in a prolonged banquet, followed by a mixed
ballet of soldiers and completely naked young women, who danced
in a circle, beat time with their feet, and accompanied their
gestures with a curious sound of clucking. At last the Austrian
Consul, overcome by the exhilaration of the scene, flung himself
in a frenzy among the dancers; the Governor-General, shouting
with delight, seemed about to follow suit, when Gordon abruptly
left the room, and the party broke up in confusion."

One feels, here, that there must be some distant spiritual likeness between Gordon and our own Iraqi proconsul. Poor Smilin' Jay never quite got why the Shi'ites were so� intransigent. He obviously rather liked the way Chalabi wore a suit, talked English, and could provide him with a decent drink, after he descended from his heavily guarded car, at the Hunter's Club. But the rest of those people! And the tiresome complaints about electricity, as if they were going to do anything with it when it was turned on except scheme under electric lightbulbs against all the good that America was prepared to do their godforsaken country! No wonder Smilin' Jay hated to forage out from Saddam's palace.

In the meantime, one sees the Gladstonian reflex kick in among American and British liberals. Gladstone, you will remember, was vaguely against the empire, while Disraeli was an ardent imperialist -- but somehow the Empire got much bigger under Gladstone. The opportunity to put a central bureaucracy to work governing people for their own good was simply too irresistable. Gladstone's ghost haunts the suggestion of Hugo Young, in the Guardian, that the American forces remain for the foreseeable future in control of Iraq, and the op-ed in the NYT today by a Suzanne Nossel


"The law of occupation is useful for Iraq mainly because it establishes clear lines of accountability for putting the country back on its feet. The first duty of an occupier is to establish a system of "direct administration" over the occupied population. In doing so, the United States will put itself on the line for success or failure in a way that retired Lt. Gen. Jay Garner's ill-defined mandate scrupulously avoided. If Baghdad's citizenry still suffers from spotty electricity, rotten garbage on street corners and poorly equipped hospitals, there will be no doubt where fault lies.

"Rather than a muddy division of responsibilities among the United Nations, local authorities and coalition forces, an official occupation makes clear that the buck stops with the United States and Britain. The proposed division of labor, wherein the United Nations' special representative will fulfill specific roles under a British-American umbrella, protects against what happened in Somalia, where the United Nations was blamed for American misjudgments."

Ah, that muddying of responsibility. Obviously, the Iraqis, who are being represented by ESP by Pentagon undersecretaries and their various defense industry cronies, need to know that they have only one occupier -- it makes the servants so much more pliable. It is a situation parallel to the British-French governance of Egypt, which -- in order to keep the Egyptian people up to snuff about who their masters were -- phased into British governance of Egypt for about eighty years, to the advantage of the Briitsh.
The reluctant assumption of imperial power is again beckoning to the always latent liberal instinct for gaining control of people's lives in order to make them better -- in other words, to boss them around. And, of course, that reluctance leads to profit -- but only, of course, in the name of virtue. So the US is proposing, for Iraq's own good, to seize control of the oil industry and use it, as the US sees fit, to rebuild the country -- paying out the money, of course, to US contractors.

Isn't it wonderful when there's such synergy between good intentions and campaign contributers! It makes us all glow, rosily, here at LI.