Madison - Is your underwear undermining your values? The new scrutiny of CEOs that has been ignited by the historic Wisconsin labor protests has turned up concerns close to home, very close to home--for the vast majority of people who wear underwear. To take a page from the ubiquitous Capitol One ad campaign, what's in your blue jeans? Is your underwear choice unwittingly paying the salary of a CEO who shares your values or who actively works against them?
Jockey International's CEO and Her Connection to Koch
It turns out that underwear executive Debra Waller -- the Chief Executive Officer of Jockey International, Inc. -- revealed a lot about her opinions at the most recent annual convention of "Americans for Prosperity" (AFP) for its chapter in Wisconsin. AFP is chaired by David Koch, an oil industrialist who is one of the 25 richest men on the planet, and who helped create AFP to push his ideological agenda to slash taxes and government services. Waller's speech was clothed in AFP's anti-tax rhetoric. But that is not her only connection to Koch. She also attended Koch's 2010 strategy retreat in Aspen. So the convention speech was not just a one-time Koch thing.
Waller was introduced at the AFP event as the CEO of Jockey International. The Wisconsin-based company manufactures men's and women's undergarments and outerwear under the Jockey brand name. Last year, after the uproar over NFL rookie Tim Tebow's plan for a pro-life ad during the Super Bowl, Jockey International chose the affable, though controversial, athlete as its spokesperson.
"If I Ran My Business" the Way the Government Does ... But What about M&I Bank?
As noted in the Center's special report on the AFP conventions, Waller delivered a speech against taxes and various policies to the Wisconsin conventioneers. She told the crowd of Tea Party activists: "We have people that are running our country and our state that do not know how to manage money, and as I said earlier, I'm a business owner and if I ran my business the way the state and government are running their business, I would be out of business or in jail."
Waller did not tell the crowd how the business she oversaw as a board member had gambled in the mortgage market and then taken a huge government handout of almost $2 billion, or what that nearly $2 billion could have bought instead. She spent five years on the Board of Directors for Marshall & Ilsley Bank, a Milwaukee-based financial institution that took $1.7 billion in Wall Street TARP bailout money and has not paid the American people back, according to Pro Publica. (M&I is also the target of a "Move Your Money" effort in response to the bank's support for controversial Wisconsin Governor Scott Walker.)
Approving Huge Salary Increases after the Wall Street Crash.
Waller also did not tell the Tax Day Tea Party protesters at the convention that as a board member of the bank, she helped approve executive compensation packages that included a $125,000 raise in the annual salary for M&I's CEO in 2009 (from $750,000 to $875,000) and a $238,000 increase in option awards (from $668,000 to $950,000), despite the bank's financial performance the year Wall Street crashed -- but he was given "no bonus" and less in stock than the year before. Also, due to the wording of the approved "change of control" agreements from 2008, M&I's CEO is slated to receive an additional $6 million as part of a pending buyout of the bank and another nearly $45 million is scheduled to be paid to other bank executives, despite the TARP's bar on "golden parachutes."
Waller did not tell the AFP audience how many people in Wisconsin and nationwide were losing their homes due to M&I's foreclosures, even after the bank received billions from taxpayers and even as its CEO got a raise that far exceeded the cost of living percent increases that most unions and non-union employees have been frozen out of since 2008. Heck, the dollar amounts the board gave the M&I CEO as just a raise in 2009, after the Wall Street crash, far exceeded most employees' annual salaries.
She did not tell the crowd that she served on the M&I's board from 2004 to early 2009, just after the Wall Street crash, or that she served on the board's "Risk Management Committee." In 2009, former regulators saidM&I's toxic asset levels were "off the charts," and its percentage of risky loans would be considered "unsafe and unsound."
How Much Does that Work Out to Per Hour?
She did not reveal to the conventioneers that for her last year of part-time service on M&I's board, she was paid over $112,000 in total compensation, despite the Wall Street crash. It is not clear what that is per hour of time spent.
She did not say that her part-time M&I gig rewarded her with over $124,000 in total compensation in 2007 either, or the other amounts of cash or stock she previously received from M&I as an overseer of its operations.
She did not tell the crowd how much she takes home annually as the CEO of Jockey International, the company purchased by her grandfather back in 1960. Jockey is a privately-held business that does not publicly reveal its revenue or how much it pays in taxes Wisconsin or elsewhere. She did tell the crowd "I pay taxes just like you."
She did not disclose how much she pays in income taxes for her own executive compensation package or how much is left over for luxuries. She did not tell the audience how much she pays in property taxes and for what property she has inherited or bought.
She did complain that Wisconsin residents pay "10.2%" of their income in state and local taxes, but did not tell the crowd how much the remaining 89.8% her various annual income streams amount to.
And What About the (Former) American Textile Employees of Jockey?
She also did not tell the Tea Partiers how her company lobbied for the Central American Free Trade Agreement and then closed factories in the U.S., shipping manufacturing jobs to Honduras. She did not explain how American families could make ends meet if they had to compete with the wages paid in a third world country. (The U.S. per capita income for 2009 was $39,000; the per capita income in Honduras is less than one-tenth that amount.)
But, Hey, It's Good to Be King or Queen!
So, the underwear executive kept a lot of facts that might have been illuminating under cover, so to speak. Jockey's slogan used to be "The best seat in the house." That seems to be true, at least for CEOs and leaders of big banks.
There is no doubt that Waller is entitled to her opinion against paying taxes to which she objects that "bring in a lot of money to the state," and her opinion against Wisconsin's efforts to address global warming or to reform health insurance, all of which she complained about in her speech. (There is no report on what she said at the Koch's private Aspen strategy session.)
Jockey International's new corporate statement of purpose is "to satisfy the human need for comfort." Given its CEO's alliance with the billionaire Koch, the quote seems especially fitting -- for some, if not the rest of us. The rest of us are stuck with a Wall Street bailout of the bank on whose board she served that might not ever be paid in full.
And most of the rest of us will never get paid over a hundred grand for a few hours of service on a corporate board. Most of us will never get a chance to run the company our granddad bought and then complain about how much money we pay in taxes as CEO of the family business.
So Who's Got Your Back and What's Covering Your Arse?
But most of us will buy underwear in the years to come. And those of us who care about these issues will remember to think of Debra Waller when we think of "Jockey for her" and David Koch when we think of "Jockey for him." And then we will think of other choices we can make to cover our arses, as my friend Dezy says.