'Overpaid' Circuit City CEO joins 'overpaid' ex-employees on bread line
Who says there's no such thing as karma? CEO who came up with idea to replace 3,400 employees with lower-paid workers, gets dumped.
After leading Circuit City to the brink, credit Philip J. Schoonover with finally making a good decision byfrom the company. Well, that's the polite version of today's late afternoon executive shuffle at the consumer electronics retailer. More likely, Schoonover's disastrous stewardship finally pushed a do-nothing board to replace him with James A. Marcum.
As was pointed out to me by a colleague, karma definitely had a hand. In 2007, Schoonover orchestrated the dismissal of 3,400 employees because they were making too much money, replacing them with less experienced workers willing to take less pay. This was all the more stunning considering that since becoming CEO in 2006, Schoonever pulled in annual compensation in excess of $2 million. But as we've learned lately, that's the way the system works.
"Retail is very competitive and store operations just have to contain their costs," a Circuit City spokesman told The Washington Post when the layoff plan got announced. "We deeply regret the negative impact that was had on these folks. It was no fault of theirs."
Ah, yes, and now please pass me the Grey Poupon.
In today's prepared statement, the new board chairman, Alan King, displaying the same deft sense of humor of his more famous comedic namesake, credited Schoonover with being "very effective in partnering with senior management and in helping identify opportunities to deliver increased value for our shareholders, customers, vendors, and associates over the long term."
I'm not sure what that means in English and I used to cover retail electronics as a beat. But why pile on? As far as improving shareholder value goes, that's a more difficult claim to understand. The stock closed at $1.70 on Monday, compared with its 52-week high of $9.65.