Greed at a Glance
A weekly update on avarice in America and beyond

January 21, 2008

Telecom giant Sprint Nextel announced plans Friday to ax 4,000 of the company's 60,000 jobs. Just-hired Sprint CEO Dan Hesse, the Wall Street Journal reports, wants “to show investors a new commitment to efficiency and cost discipline.” That commitment won’t extend to Hesse’s own take-home. The new CEO’s personal pay deal, signed in December, guarantees Hesse just shy of $4 million for his first year as chief executive, plus $10 million in Sprint shares if he sticks around for three years. Hesse, with his quick-trigger layoffs, is following standard CEO operating procedure. But at least one U.S. chief exec is challenging this standard script. Business Week has just profiled Chip Conley, a California hotel chain CEO who cut his take-home to zero — and convinced his fellow execs to take pay cuts, too — to avoid having to lay off front-line workers. The best part: Conley's selfless approach to corporate crisis ended up restoring his company to financial health . . .

Twenty years ago, all of Ireland held only a few hundred households with fortunes worth a million euros. Today, over 30,000 euro millionaires call Ireland home. These new Irish rich, notes Financial Times correspondent John Murray Brown, “think nothing of flying to the U.S. for a weekend of shopping, and party invitations among the elite now routinely include longitude and latitude details for the benefit of incoming helicopters.” This fantastically rapid accumulation of wealth has sent Irish property values soaring. Home prices have nearly quadrupled over the past decade, and houses now average nearly $600,000 in Dublin. Investments in public services, meanwhile, have lagged. Only one nation in the entire developed world, the United States, has a higher poverty rate. Some prominent Irish fear the nation is losing its moral compass. Brenda Fricker, an Oscar-winning actress, told reporters in November she was leaving Dublin to escape “the money-motivated” mindset of a city that has “become very tough and hard.”

Last Monday, on the eve of the Michigan Presidential primary, the three top GOP candidates all stopped by the North American International Auto Show in Detroit for a photo op to underscore their commitment to reviving Michigan's reeling economy. In the mean time, elsewhere on the auto show floor, luxury carmakers were underscoring their commitment, as Lamborghini CEO Stephan Winkelmann put it, to “serve islands of wealth around the world.” Maserati’s James Selwa defined the U.S. wealth “island” as the top one half of 1 percent of the nation’s income-earners. For this top-end crowd, Maserati last week introduced a new $147,000 model. Worldwide, Maserati sold 7,350 motorcars last year, 12 times more cars than the company sold back in 1998 . . .

This past Thursday, two days before Nevada’s primary caucuses, the “richest American that most people have never heard of” made a little history in Las Vegas. Casino mogul Sheldon Adelson, the Forbes 400 third-richest American, opened the largest hotel in the world, the newly expanded Venetian. Adelson has been making quite a bit of history lately. In 2005 and 2006, says researcher Peter Bernstein, Adelson “got richer faster than anyone else in history.” Over that two-year span, Adelson saw his personal net worth leap by $17.5 billion, the equivalent of “almost $1 million an hour, weekends, holidays, and nights included.” Adelson owns homes in four cities and hops between them in three personal Boeing jets, one a retrofitted 747. His Venetian Hotel currently operates at the only major nonunion casino in Las Vegas . . .

In Texas, elected officials don’t like to tax. But they sure love lotteries. The state now spends $33 million a year “promoting the games that inspire dreams of instant riches,” the Houston Chronicle reported last week, and nothing on “programs to help problem gamblers.” Critics consider the Texas lottery a backdoor tax on the poor — “The lottery was never designed for rich people,” says state lawmaker Garnet Coleman — and last winter Texas lottery chiefs moved to blunt that critique. They unveiled a $50 lottery ticket, the “priciest” in the nation, in a move designed to bring “people with higher disposable income into our customer base.” On that goal, the state has fallen somewhat short. Sales of the $50 ticket are running far higher in Texas zip codes with median incomes below $20,000 than zip codes with incomes over $90,000. Complains Texas Baptist lobbyist Rob Kohler: “The most expensive lottery ticket has gone from costing no more than a candy bar to now being the most expensive item in convenience stores. The state should not be in the business of separating citizens from their dollars.” That separation may soon speed up. Lottery execs are now conducting market research on lottery tickets than run $100.

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