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As stock sank, Fatcat SBC boss paid himself $19.5 million

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It's election year, and the jobless recovery has prompted complacent politicians on both sides of the duopoly to look concerned.

But in one of the most baffling collective decisions since the Jonestown Massacre, the telecommunications workers' union - the CWA - has blessed Cingular's takeover of AT&T Wireless.

Although the debt-financed takeover is predicated on deep job cuts, union boss Morton Barh urged his 700,000 telecommunications workers to endorse the deal, rather than Vodafone's rival bid, because it would "enhance long-term value for shareholders".

Since Wall Street traditionally cheers job cuts because they increase "long-term value for shareholders", you can only wonder about Bahr's thought processes here. If Vodafone had bought AT&T Wireless, employment prospects would have been unaffected. But Cingular's bid removes one competitor from the market entirely. Even more bafflingly, AT&T Wireless isn't unionized. Who is Bahr working for, exactly?

But Bahr's members will be even more dismayed to learn that as jobs disappear, the management are more than capable of looking after themselves.

Big snout, big trough

The San Francisco Chronicle's David Lazarus reports that the power behind the merger - SBC boss Ed Whitacre - helped himself to an astonishing $19.5 million in salary and bonuses last year, not counting stock options.

SBC, along with BellSouth, owns Cingular. On top of a basic salary of $2.1 million, lucky Ed received a bonus of $5.7 million, $2.4 million from the company's long-term incentive program, and $9.3 million in additional compensation.

Lazarus notes that SBC performed "dismally" last year - one of the five worst performers and the stock lost 4 per cent while the industrial index gained 25 per cent. SBC has underperformed its competitors since 2001. But Whitacre had met "performance targets" - set by a compensation board chaired by one Ed Whitacre.

While the process of tossing humans overboard when two giant companies merge is called 'rationalization', it's hard to see what is rational in this sorry tale. And if technology sector workers want to highlight their increasingly perilious job situation, they'll need to look beyond the CWA for leadership. ®

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Lazarus on Whitacre

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