| FOR IMMEDIATE RELEASE:
Monday, April 1, 2002
HOUSTON - Enron Corp.
today filed a repayment plan with the United
States Bankruptcy Court for the Southern
District of New York for current and former
senior management to repay Enron employees
for stock losses attributable to mis-management.
The plan, which has been reviewed and approved
by the Creditors’ Committee, which
the United States Trustee appointed in the
company’s bankruptcy proceeding, is
designed to repay employees whose investment
of skill and effort in the company was instrumental
in its past success. “We realized that
we didn't work any harder than any other
employee of the company" said former
Chairman and CEO Kenneth Lay. "Nor
did we have any more of our funds at risk.
It seemed inappropriate for us to give ourselves
multi-million dollar windfalls while our
fellow employees were forfeiting their life
savings."
Recent reports that Enron Senior Management
sold off $1.1 Billion dollars of company
shares, during a period when management
decision to change 401k provisions prevented
employees from selling shares, are balanced
against the employees, "midlevel managers
and others who invested in Enron stock via
the energy trader's 401K savings plan (who)
lost an estimated $1.3 billion" during
the same time. The repayment plan is expected
to make up the difference.
Said former Chief
Financial Officer (CFO) Andrew Fastow, "I
made about $30 Million off just one off-the-books
partnership (LJM2) so I figure I can contribute
half that to the repayment fund. That works
out to about $750 for each of them, but
I think it's the least I can do."
Former President
and CEO Jeffrey Skilling was paid $10 Million
in annual and long-term compensation in
2000, the last year for which the company
proxy statement is currently available.
When asked about his contribution to the
repayment fund, Skilling commented "About
a third of that was in restricted stock
options, and we all know how our mis-management
of the company has destroyed its stock price,
so I really only made $6.5 Million. I don't
see why I should be paid 130 times what
our average employee earns, so I wanted
to return some of it to the repayment fund."
Enron's top five
officers were paid just under $50 Million
in annual and long term compensation in
2000. Management Guide, John Reh, reports
in his feature article CEOs Are Overpaid,
that on average US CEOs were paid a salary
531 times that of the average hourly worker.
The repayment plan announced today by Enron
is seen as a first step in restoring some
degree of equity between CEO salaries and
those of their employees.
|
