Some Top-Level Execs Earn Their Fortunes1 Jun, 2005 By: Erik Gruenwedel
The ever-increasing disconnect between the salary of an average worker and the CEO's is a bit like the disparate content found on video in Robin Leach Reveals Lifestyles of the Rich and Famous and Extreme Chick Fights. The former peeks into the lives of the filthy rich, while the latter shows housewives and businesswomen kicking each other's butts for fun.
That's not to say the average CEO — whose compensation nationally has swollen from 42 times that of a rank-and-file employee in 1980 to more than 300 times today, according to the Los Angeles Times — doesn't feel at times like he works in a corporate Fight Club.
While it often appears the higher people climb up the corporate food chain, the less they can justify their bulging compensation, many executives would call the increase in stock options and bonuses “combat pay” for a work environment consumed by market competition and shareholder demands. Or as Yahoo spokesperson Joanna Steven told the Times, “We need to make sure [top U.S. paid CEO Terry Semel is] well motivated to stay.”
That apparently wasn't a concern to Time Warner, which in 2002 unceremoniously fired Warren Lieberfarb, then president of Warner Home Video and a 28-year executive with the company. Lieberfarb is now embroiled in a $30 million wrongful termination lawsuit against the studio.
According to the complaint, Lieberfarb was motivationally challenged and requested responsibility for the licensing of WB content to network, pay and basic cable TV. Although the suit said he was recommended for the position by none other than Semel, then-co-chairman of Warner Bros., he was denied the job.
Lieberfarb's request for millions in monetary damages includes $450,000 for an office and secretary, a $150,000 private screening room and a $45,000 car allowance.
Considering Lieberfarb's acumen at helping merge the lucrative DVD technologies between Warner Bros. and Toshiba Corp. years ago, it might behoove the studio to settle with him and put him to work as their negotiator in the Blu-ray Disc, HD DVD debacle.