These last few days have been chock full of personal finance news. Between the VantageScore announcement, the H&R Block banking charter and the Financial Data Protection Act, I was too busy to notice a small announcement about ChoicePoint.
Remember ChoicePoint? The company that provided 163,000 consumer records to an identity thief posing as a business customer? Turns out that ChoicePoint CEO Derek Smith was paid $5.3 million dollars in 2005. He apparently didn’t get a bonus (how sad) but he did receive use of the company plane and club dues. He also received something called "security services" related to the data breach. I am not sure what this means. Perhaps it was a team of bodyguards to protect him from enraged consumers?
What do you think about ChoicePoint’s CEO being paid $5.3 million for a year where the company exposed more than 160,000 consumers to identity theft? Share your feedback in the comments section below.
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It’s a freakin’ joke what most CEOs at big corps make these days, but especially in light of what’s happened at ChoicePoint this past year, that’s ridiculous. The guy’s pay shold be tied in more directly to his performance and the performance of his company.
Despite the major data theft, ChoicePoint still made more than $1 billion in sales during 2005. Mr. Smith’s salary seems justified from a business perspective based on those numbers. Unfortunately, consumers were the only segment who really lost out in this situation.
And to continue Emily’s point, Choicepoint was forced to pay out $15 million to have independent auditors review their data.
This may not make up for the numerous folks who will have to deal with the horror of ID theft, but it’s not like CP got off scott-free.
IMO, the FTC should have made them settle not just by paying auditors but also settling the claims of those who were subjected to ID theft. Even still, it wouldn’t even dent their $1 billion in sales.
Thanks for your comments Tman! It’s definitely a sticky situation. The FTC fine was the largest ever issued but still only 10% of ChoicePoint’s annual profits.