Next month, when he faces the judge’s sentence, Canadian-born businessman Conrad Black’s fall from grace may be complete. In July, a Chicago court found him guilty on four charges out of 13, including mail fraud and obstruction of justice. He stood accused, along with three other former executives of the newspaper company Hollinger International, of pocketing more than $60 million in non-competition payments made as part of various sales deals of the company’s newspapers. The money, it was argued in court, rightfully belonged to the shareholders.
As Black, also now known as ‘Lord Fraud’ (he renounced Canadian citizenship to accept a UK peerage), faces the possibility of spending the rest of his life behind bars, he might rue the day he ever felt the need to join the billionaires’ club.
Tom Bowers, author of Conrad and Lady Black: Dancing on the edge (HarperPress) reported on one telling moment when the Blacks were unable to transport their guest Henry Kissinger to Washington by jet because of a storm. Instead he needed to get to the train station and the fastest way was by helicopter. Amiel turned to her husband and said: “Why haven’t we got a helicopter, Conrad? The Kravises have one [a reference to the legendary buy-out king Henry Kravis, who had amassed a fortune of $2.6 billion].” Black’s smile froze: “We’re not rich like the Kravises.” It is in this milieu that one must view the trends for global executive pay.
While most ordinary mortals would be more than satisfied with a million dollars a year or so, the fact that the very rich have amassed huge wealth through stock options, or multi-million dollar bonuses awarded to traders in the top financial markets, has set the global bar extremely high.
In the shadow of such great wealth, remuneration committees seeking to attract the best global CEOs have to calculate the appropriate salary and incentive package in the light of the deals secured by other executives in their peer group. And it would be foolish to ignore the impact of the ultra-wealthy on the mind of the status-conscious executive.