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Labor Fights to Keep Corporate Books Honest, Avert Layoffs
As CWA urged, Verizon has announced that it will expense the fair value of executive stock options granted on or after Jan. 1 of this year. BellSouth has followed suit. That means the companies must subtract from their profit statements millions of dollars in the value of stock options granted to executives as compensation.
"These are victories for CWA and for unions worldwide that have been fighting a meltdown in the telecom industry that has cost a million jobs," said CWA Executive Vice President Larry Cohen. "Unexpensed stock options allow companies to falsely inflate their profits. When the numbers don't hold up, they lay off thousands of workers to cover the hidden expenses of stock options they have paid to CEOs, directors and others."
The decision by Verizon's management came shortly after CWA submitted a shareholder resolution in November 2002 calling for the expensing of stock options.
"We have a vision of a productive communications sector serving our communities. We need to get away from financial speculation and toward productive investment in new technologies and universal service," said Cohen, who is also Telecom sector president of Union Network International. UNI represents more than 2 million telecom workers in 100 countries.
Cohen and telecom union leaders in the United
Kingdom, Mexico and Denmark spoke out in a video news conference in September calling for corporate reform and public policy in each country that provides full financial disclosure, universal affordable service and good jobs with quality service.
In August 2002, CWA President Morton Bahr and IUE-CWA Division President Ed Fire praised General Electric for a similar, voluntary decision to expense options.
"As of Oct 25, 2002, 68 companies had elected to expense stock options, including Amazon.com, AT&T, and General Electric, according to Standard and Poor's. In our view, these decisions demonstrate a commitment to transparency," CWA's filing with Verizon stated.
Other CWA Shareholder Resolutions
The Knight Ridder Council of Newspaper Guild-CWA locals has submitted a similar shareholder proposal on the expensing of stock options to Knight Ridder Inc., which owns a chain of newspapers employing TNG-CWA members.
Other CWA shareholder resolutions to be considered this year address executive compensation and stock pricing in various ways.
At Verizon and at AT&T, CWA has submitted proposals seeking to limit executive compensation to 50 times the compensation paid to the average employee. Verizon, not surprisingly, has asked the Securities and Exchange Commission not to require that shareholders have an opportunity to vote on the proposal.
CWA and the Electrical Workers have submitted a shareholder proposal to Sprint seeking to require that the company not re-price stock options after stock prices have fallen so that holders can still exercise the options at a profit.
For example, if an option to buy stock is granted with an exercise price of $50 and the stock's value goes up to $100, the holder of the option can buy the stock at $50 and make an instant $50 profit. If the stock's true value falls to $40 a share, the $50 option becomes worthless - unless, of course, the option is re-priced to $20 a share or some similarly low price that again provides a substantial profit margin.
"These are victories for CWA and for unions worldwide that have been fighting a meltdown in the telecom industry that has cost a million jobs," said CWA Executive Vice President Larry Cohen. "Unexpensed stock options allow companies to falsely inflate their profits. When the numbers don't hold up, they lay off thousands of workers to cover the hidden expenses of stock options they have paid to CEOs, directors and others."
The decision by Verizon's management came shortly after CWA submitted a shareholder resolution in November 2002 calling for the expensing of stock options.
"We have a vision of a productive communications sector serving our communities. We need to get away from financial speculation and toward productive investment in new technologies and universal service," said Cohen, who is also Telecom sector president of Union Network International. UNI represents more than 2 million telecom workers in 100 countries.
Cohen and telecom union leaders in the United
Kingdom, Mexico and Denmark spoke out in a video news conference in September calling for corporate reform and public policy in each country that provides full financial disclosure, universal affordable service and good jobs with quality service.
In August 2002, CWA President Morton Bahr and IUE-CWA Division President Ed Fire praised General Electric for a similar, voluntary decision to expense options.
"As of Oct 25, 2002, 68 companies had elected to expense stock options, including Amazon.com, AT&T, and General Electric, according to Standard and Poor's. In our view, these decisions demonstrate a commitment to transparency," CWA's filing with Verizon stated.
Other CWA Shareholder Resolutions
The Knight Ridder Council of Newspaper Guild-CWA locals has submitted a similar shareholder proposal on the expensing of stock options to Knight Ridder Inc., which owns a chain of newspapers employing TNG-CWA members.
Other CWA shareholder resolutions to be considered this year address executive compensation and stock pricing in various ways.
At Verizon and at AT&T, CWA has submitted proposals seeking to limit executive compensation to 50 times the compensation paid to the average employee. Verizon, not surprisingly, has asked the Securities and Exchange Commission not to require that shareholders have an opportunity to vote on the proposal.
CWA and the Electrical Workers have submitted a shareholder proposal to Sprint seeking to require that the company not re-price stock options after stock prices have fallen so that holders can still exercise the options at a profit.
For example, if an option to buy stock is granted with an exercise price of $50 and the stock's value goes up to $100, the holder of the option can buy the stock at $50 and make an instant $50 profit. If the stock's true value falls to $40 a share, the $50 option becomes worthless - unless, of course, the option is re-priced to $20 a share or some similarly low price that again provides a substantial profit margin.