Secrets of the Truly Shameless

Thomas Usher promises USX shareholders that he will do half as much work for twice as much money. Will they go for it?

Long ago, a buddy told me I lacked chutzpah. There was no denying it. Yet even as I began marching down the far slope of middle age, I never relinquished dreams of self-improvement. A good thing, because the other day I stumbled upon the perfect role model to help boost my chutzpah quotient. He is Thomas Usher.

If the name rings no bell, it may be only that he works far from such centers of nerviness as Wall Street, Hollywood, or Silicon Valley. Usher is CEO of USX (X ), the Pittsburgh parent of U.S. Steel and Marathon Oil. He aims by yearend to recast the steel and oil units as separate, independent companies. Shareholders are tentatively set to vote on the plan on Oct. 16. USX declined to have Usher or his fellow directors go over it with me. Luckily, a preliminary proxy statement gives plenty of details, enough for me to have been able to distill these Seven Habits of Truly Shameless People:

1. Halve the work, double your pay. Usher is set to keep running U.S. Steel but serve Marathon only as nonexecutive chairman and head of a panel overseeing a joint venture. Last year, his salary and bonus came to $3.8 million. Next year, Usher is in line for a minimum of $7.2 million, as USX's board has voted to give him a $6 million "separation completion bonus," among other rewards (table).

2. Get more, and more. Despite his limited role at Marathon, Usher stands to gain 500,000 Marathon stock-appreciation rights. These work like options. In August, Usher already got a special grant of restricted Marathon stock worth $2.9 million.

3. Context and timing are everything. For the truly shameless, making out so splendidly works best amid bear markets, looming recessions, and nationwide droughts of bonuses for lower-level executives. Real chutzpah? That is announcing, as Usher did just one week after getting his $2.9 million in stock, that USX will close its Fairless Works steel and tin mills near Philadelphia, ending 600 jobs. "This is a sad day for U.S. Steel," Usher said in a press release.

4. Use discretion. Ironically, being discreet can be the better part of shamelessness. It yells "of course" to the boldest, most galling move. USX's proxy shows such quiet insouciance by tucking first mention of Usher's $6 million payday between parentheses, this way: "(including a completion and retention agreement with the chairman of the board of directors of USX that, among other things, includes a $6 million bonus)."

5. Know that history is bunk. Pay no mind to a discouraging record, such as the laggardly showing of Marathon's tracking stock since Usher became CEO in 1995 or the negative 27% total return on U.S. Steel's. Rest instead on such assertions as this one in the proxy: "The board of directors determined that Mr. Usher's unique experience and talents will bring value to both groups of stockholders."

6. Don't stop thinking about tomorrow. The future always holds the promise that what's good for you today will someday, somehow, also be good for those you serve. So, focus them forward. As Nell Minow, founder of the Corporate Library, a Web site devoted to research on corporate governance, reminded me, "shareholder value" was a key reason why USX in 1991 took the unusual course of issuing its two tracking stocks while remaining one company. Now, USX believes that "the businesses of the Marathon Group and the U.S. Steel Group will improve, and stockholder value will therefore increase" if they split.

7. Remember friends. No one, however shameless, is an island. Not even a CEO, who needs directors to go along with his plans. Usher's board of directors includes a five-member compensation committee, which is chaired by US Airways Group's former CEO, Seth Schofield. Schofield, plus two more compensation committee members, Verizon Communications Co-CEO Charles Lee and Phelps Dodge Chairman Emeritus Douglas Yearley, are set to join both the U.S. Steel and Marathon boards. They, along with a fourth USX director named to both boards, Rensselaer Polytechnic Institute President Shirley Ann Jackson, will see their compensation as directors double.

With all this in mind, I have resolved to use more chutzpah on the job. I'm thinking, maybe a big bonus plus lots of stock and options (even as I cut back to writing half as many columns). Of course, my future work will be twice as good. That's a deal you would vote for, wouldn't you?

By Robert Barker

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