Those Scrooges at American Express Co. sure know how to wreck a Christmas. While you were out running up your credit cards in a holiday buying binge, American Express eliminated 7,000 jobs.
The layoffs came after an AMEX subsidiary, Shearson-Lehman Bros., merged with one of the biggest brokerage houses on Wall Street, E.F. Hutton. According to one industry analyst, the layoffs were necessary because of overexpansion and the stock market tumble. The belt had to be tightened somewhere.
As usual, it was the little guy's belt that got cinched. But the bad business climate that led to those layoffs has not halted the gravy train for AMEX executives. The people at the top continue to get goodies, modestly referred to as "incentives." The people at the bottom get a going-away party.
Earlier this year, before the stock market crash, the AMEX board of directors voted to give 16 members of the board $78,500 each in stock options, reasoning that would be an "incentive."
The latest example of the plush fringe benefits available to corporate VIPs is a resort complex now under construction by Shearson-Lehman at the pricey Beaver Creek ski resort near Vail, Colo.
A Shearson-Lehman spokesman assured our reporter Frank Byrt the luxury accommodations will be used primarily for business conferences. Presumably, it wouldn't look right for AMEX people to have those meetings in their offices.
The resort complex will be available for private use by vacationing VIPs who don't have any business on the agenda, but only if they reimburse the company. We thus predict the need for a lot more AMEX business meetings when the powder is fresh. Maybe some of the folks can even get AMEX to pick up the tab for a $32-a-day ski pass at Beaver Creek if they talk shop on the lift.
One company official, former president Gerald R. Ford, won't need to borrow the company condo. He lives down the street from the Beaver Creek complex. Ford takes home about $200,000 a year as a part-time adviser and consultant to Shearson-Lehman.
Other former government officials have also found AMEX and its subsidiaries a great place to work. The board of directors includes former secretary of state Henry A. Kissinger and former transportation secretary Drew Lewis. Each takes home more than $36,000 a year serving on the board, not including stock options.
Some celebrity board members pork out at the AMEX trough in a variety of ways. Kissinger gets another $420,000 a year as a consultant and lecturer for AMEX and Shearson-Lehman.
Lewis was a top executive for the former AMEX subsidiary Warner Amex Cable for less than three years and collected $12.6 million via salary, stock options and bonuses. Lewis can't devote all his time to AMEX; his primary job is president and chief executive officer of Union Pacific Railroad.
The nine top executives of AMEX and Shearson-Lehman took home an average of $1.3 million last year.
Now we're beginning to understand why all those little folks had to be let go.