Wednesday, November 29, 2006


Getting A Rise Out Of The Man

Bludgeon-faced Barry Diller, America's highest paid CEO with $275 million in his yearly pay envelope, is a scary man to behold - much less listen to. But we're hearing from him nonetheless. Lately, he's been sputtering away at "the cottage industry of compensation consultants" who have looked askance at his quarter-billion-plus yearly income. He reserves his choicest disdain for The Corporate Library of Portland, Maine, which has recently awarded a grade of "D" to the governance of Diller's flagship, InterActiveCorp. (or IAC). Red as a beet, Diller fumed that the issue of corporate governance is "completely misunderstood, certainly by the birdbrains that write about it. I mean their reactions to everything are so dim, and I am talking about The Corporate Library and I'm talking about these people that analyze these things and haven't a clue." Some would take exception to that remark, even beyond the grammatical infelicity of using "birdbrains that" and "people that" instead of "birdbrains who" and "people who". But then, people of any stripe really are just objects to a CEO like Diller, aren't they?

"I'm sure he is bothered by the bad grades that we have given him," replies Corporate Library co-founder Nell Minow. "All of our governance metrics are based on the effect that governance has on strategy. I would be happy to explain it to him if he would like but clearly he doesn't understand what we do."

Diller insists that his company is run just fine, despite the incestuous network of mutual back-scratching on his board of directors. He claims that focusing on corporate governance is not the way to run a company, and "that it's really hurting American business." Clearly, Mr. Diller has no need for an objective opinion because - subjective as he may be about his own performance - he is still a genius and a demi-god and is incontestably always right. Anyone who raises an eyebrow at his $275 million compensation is simply, as he puts it, "loony".

Diller scoffed at The New York Times for implying that he was "the laziest man in America" because he needed to get paid $150,000 an hour just to do his job. "The whole issue of executive compensation and particularly the policy of The New York Times business section toward (it is) absolutely loony." Among the ignoramuses and imbeciles he so roundly mocks is reporter Gretchen Morgenson, a "trenchant and incisive" winner of the Pulitzer Prize whom her editor has called "one of the market's shrewdest and most fearless guides."

But The Emperor will have nothing of it. We are all fools, madmen and idiots, he thinks - and says. The irony is that his remarks don't help his case at all. They only confirm the heedless and egocentric arrogance that fueled his greed to begin with. The best thing about this whole fray is that at least we got his attention.

"Diller derides watchdog groups, NY Times" from MSNBC

A great post -- and thanks for the mention! We didn't give Diller's board a bad grade because they don't meet an arbitrary definition of independence. We gave them a bad grade because they pay him much too much money. The return on investment for any dollar spent paying him is lower than a t-bill. (By the way, though, it's Nell, not Neil.)
Ms. Minow,

Thanks for the comment. I have duly corrected your name in my posting. I have read about The Corporate Library before. Keep up the good work! It is much appreciated...
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