La-Z-Boy CEO living the American dream

(Note: The following is my column for this week's Newton County News.)

One constant in today’s economic environment has been bad news.

Right now, we are probably only weeks, maybe even just days, away from paying more than four dollars a gallon for gasoline, and the higher prices have had an effect on the entire economy since everyone is having to pay them.
If it’s not the price of oil, it’s a business closing its doors forever, or simply taking jobs that have always been done locally and outsourcing them to another country.

The Newton County area has been lucky that one of its major employers, La-Z-Boy Neosho, has kept a fairly stable workforce over the years, but that cannot be said for many of the places which used to have La-Z-Boy plants. Many of them have been closed as the company has outsourced its work, primarily to China, where the workforce works for slave wages and the company can pay bigger dividends to its stockholders.
The architect of La-Z-Boy’s decisions to send American jobs overseas is CEO Kurt Darrow, and while he and the company’s board of directors leave damaged lives and economic chaos in their wake, Darrow is doing just fine, thank you.

According to a proxy statement filed earlier this week with the federal Securities and Exchange Commission, Kurt Darrow will receive a pay package worth more than $1.6 million this year.

The $1,658,509 package includes a base salary of $675,000, $375,505 in stock awards, $330,310 in option awards, $202,000 in non-equity incentive plan compensation, and $75,695 in “all other compensations. The “all other” compensation includes company contributions to a 401K plan and an executive deferred compensation plan.

The proxy statement indicates Darrow ‘s pay package for 2007 was $1,343,791.

Even as La-Z-Boy filed its report with the SEC, 600 workers at its Tremonton, Utah, plant have lost their jobs. A company spokeswoman, Kathy Liebmann, told a Utah newspaper that La-Z-Boy has hired a company to help employees with “counseling, employment workshops, resume preparation, interview preparation and related services.”
Ms. Liebmann would not answer any questions about the severance packages those 600 employees would receive, leaving no doubt they would be limited to put it charitably.
Those who work for someone else may eventually have to face that day when their jobs are no longer available, the victims of an economic slump, technological advances, or even simple disagreements.

That could even happen someday to the La-Z-Boy CEO. Unlike his employees, however, Kurt Darrow will be sitting pretty if his time at La-Z-Boy comes to an end.
According to the proxy statement, if Darrow is fired or replaced, he will not have to worry about La-Z-Boy providing him with “counseling, employment workshops, resume preparation, interview preparation and related services.”

Darrow’s contract guarantees that he will receive three years worth of severance pay, be allowed to continue his company insurance and retirement plan, and have a total package worth $3,044,433.

Is this what they mean by “The American Dream?”