Stupidity is contagious. It gets us all from time to time. Even respectable companies can catch it. As I do every week, let's look at five dumb financial events this week that may make your head spin.
1. Your tax dollars at work
If you're wondering how government-cheese recipients are going to attract and retain key executives at a time when bonuses are being frowned upon, check out the pay stubs.
Citigroup (NYSE: C ) is handing out pay raises in lieu of bonuses, with the salary bumps apparently coming in as high as 50%. Normally, few people beyond shareholders would care about a company's pay practices. However, when you're talking about a company that's tethered to the TARP, to the tune of $45 billion, you realize that we're all shareholders in Citigroup.
It's a shame that Citigroup isn't raising bonus requirements to levels that truly instill incentive. But then, what else would one expect from companies that made enough bad decisions to tap the vein with TARP injections to begin with?
2. Boeing, Boeing, gone
What's the difference between the tooth fairy and Boeing's (NYSE: BA ) 787? Neither one seems to exist, but at least the tooth fairy leaves you a little money behind for your trouble.
Boeing is once again delaying the maiden voyage of its Dreamliner jet. For those scoring at home, Boeing has now delayed its mammoth 787 six times. Even if one can argue that this is the wrong time to be introducing a flagship plane as airlines are scaling back their fleets, Boeing's credibility is fading with every "holding pattern" announcement from the corporate cockpit.
3. Trudy, madly, deeply
CEOs don't have to be endearing, but at least they should appear to be eating their own cooking. Take Talbots (NYSE: TLB ) CEO Trudy Sullivan. Shares of the struggling apparel retailer -- which is so backwards these days that we should be calling it "Stoblat" -- fell sharply on Monday, after it was revealed that Sullivan would be receiving $1.2 million to offset reductions in her retirement benefits package.
This comes at a time when Talbots has laid off hundreds of hires, has frozen its pension plan, and has even axed its dividend. In other words, everyone from income-investing retirees to Talbots associates have to worry about how they are going to get by in the future. Why not Sullivan?
Even if Sullivan is perfectly entitled to the money as a stipulation of an employment package she signed a couple of years ago, the move just looks bad. Don't be surprised if angry shareholders raise a stink and try to rock the boat at the next annual shareholder meeting. Maybe I'll make a mint by selling "J. Jill for CEO" T-shirts outside.
4. Forgiver transplant
In a week that has seen us lose Michael Jackson, Farrah Fawcett, and Ed McMahon, we're starting to realize how close we also came to losing Apple's (Nasdaq: AAPL ) Steve Jobs.
One of the tech world's best-kept secrets, apparently, is that Jobs went to Tennessee for a liver transplant.
There are several good reasons for Jobs -- and Apple -- to keep this on the down low. It's a personal health issue, and Jobs had already disclosed that he was taking a medical leave. Drawing attention to the procedure may also lead some to speculate how Jobs was able to catapult to the top of the list of liver recipients.
However, this move makes the Dumb List because Jobs is still a very important part of Apple. The company managed itself just fine in his absence, but investors deserve to know the health conditions of key executives. If football teams are required to post injury reports -- whether it's for the sake of rival preparation, fantasy leaguers, or even gamblers -- companies should come clean if any executive is in such dire medical straits that an organ transplant is required.
5. Game over for one Microsoft executive
Microsoft (Nasdaq: MSFT ) lost a major player in its gaming division, when John Schappert decided to return to Electronic Arts (Nasdaq: ERTS ) .
Schappert oversaw EA's game-development studios and online infrastructure for years before leaving for Microsoft. Now he'll head up EA's online gaming efforts.
EA isn't exactly a slouch in online gaming, but it's clearly no Activision Blizzard (Nasdaq: ATVI ) . Maybe it's the challenge to make EA the top video game company again that won him over. Maybe it's the compensation package he was offered. Either way, it doesn't reflect well on Microsoft.
Let's beat the Dumb Drum:
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