Cheney’s Halliburton Stock
By Justin Gardner | Related entries in General Politics, Money, War
The fact that Cheney owns so much Halliburton stock is such a glaring conflict of interest it’s laughable.
Now comes news that his stock options gained 3,281%. Equally as laughable?
From Raw Story:
Sen. Frank Lautenberg (D-NJ) asserts that Cheney’s options — worth $241,498 a year ago — are now valued at more than $8 million. The former CEO of the oil and gas services juggernaut, Cheney has pledged to give proceeds to charity.
Here’s a year to date view of the stock’s price.
Sure, it’s doubled, but options worth $241,498 a year ago are now worth over $8 million?
Let’s try to do the math here. The story say that Cheney has about 433,333 Halliburton stock options. Right now, at about $61 per those shares are worth over $26 million. But the story says that Cheney’s options are only worth $8 million. That’s means the exercise price, or the price Cheney has to buy his options for, have to be around $42. That means he has to fork over $18 million to buy his shares. The difference between the two big numbers in this paragraph is, you guessed it, $8 million.
However, this time last year, the shares were worth only $35 per or a total of $15 million. If you compare that with the exercise price of $42 and $18 million, Cheney was faced with a loss of nearly $3 million this time last year.
These numbers aren’t adding up. Where does the 3,281% gain come from?
Hell if I know.
But in the end, these numbers are really the ones that boggle my mind.
Cheney continues to received a deferred salary from the company. According to financial disclosure forms, he was paid $205,298 in 2001; $162,392 in 2002; $178,437 in 2003; and $194,852 in 2004.
How can he still receive a salary from a company that gets no-bid contracts worth billions from our government?
Amazing…
This entry was posted on Wednesday, October 12th, 2005 and is filed under General Politics, Money, War. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
October 12th, 2005 at 8:41 am
Was any of this “unknown” when the Bush/Cheney ticket was running for prez/vice-prez?
October 12th, 2005 at 9:35 am
I’m sure it was, but Cheney hadn’t decided to give the money to charity beforehand.
In the end, it doesn’t matter now because some branch of the government has deemed this type of compensation okay, but come on. In reality, it just doesn’t pass the smell test.
October 12th, 2005 at 10:59 am
If I remember right, it was a seperation pay that was to be divided up and paid over a 5 year period.
As for the smell test, it has been investigated completely and nothing was found to be wrong.
“We asked Cheney’s personal attorney to document that, and he did, supplying several documents never released publicly before:
A Halliburton pay statement dated Jan 2, 2001 shows just under $147,579 was paid that day as “elect defrl payou,” meaning payout of salary from the company’s Elective Deferral Plan. That was salary Cheney had earned in 1999, but which he had chosen previously to receive in five installments spread over five years.
Another pay statement dated Jan. 18 shows $1,451,398 was paid that day under the company’s “Incentive Plan C” for senior executives. That was Cheney’s incentive compensation — bonus money — paid on the basis of the company’s performance in 2000. Cheney had formally resigned from the company the previous September to campaign full time, but the amount of his bonus couldn’t be calculated until the full year’s financial results were known.
Cheney’s personal financial disclosure forms, together with the pay statements just mentioned, show that Cheney has received $398,548 in deferred salary from Halliburton “as vice president.” And of course, all of that is money he earned when he was the company’s chief executive officer. Cheney was due to receive another payment in 2004, and a final payment in 2005.”
source is factcheck.org
October 12th, 2005 at 1:01 pm
No, I agree that nothing was found wrong, but I’m not talking about what is legal and what isn’t. Something may be perfectly legal, but publicly suspect. Basically, it looks awful and harms somebody’s credibility. Bill Frist has run into this recently, although he may have actually broken a law. I don’t think that’s decided yet.
That’s all I mean when I say it doesn’t pass my smell test.
Neither of you think it looks REALLY bad that Cheney is still receiving compensation from Halliburton, while the company’s stock has doubled in the past year? Politics isn’t always about legality (clearly) and that’s why I bring this up.
October 12th, 2005 at 1:03 pm
Legal or not, this ethically stinks.
October 12th, 2005 at 5:44 pm
Justin, JonBuck:
Do you guys understand what “deferred” means? The income that Cheney is receiving was earned *before* he became Vice President. Are you really suggesting that once elected to office a person must forego income that has already been earned but not yet paid?
Your criticisms are based on a complete misunderstanding of the facts.
October 12th, 2005 at 7:14 pm
Radar:
How do you respond to the contention that this is a clear conflict of interest, regardless of when this pay was earned? It may be legal, but in light of the no-bid contracts his former company frequently gets, it is not ethical.
October 12th, 2005 at 8:18 pm
Radar, I can’t speak for JonBuck, but my criticisms are based on a personal view of the situation. It looks bad. Really bad.
And yes, I am saying that once a person is going to lead this country, he or she should forgoe income from private interests.
Again, just a personal opinion.
October 12th, 2005 at 9:19 pm
As I understand it Cheney took out an insurance policy covering his deferred income, paid for out of his own pocket, so he gets the money from someone no matter HOW the companies he was formerly employed do.
What manner of ethics requires a person to forfeit income they have previously earned?
Oh that was a foolish question, wasn’t it? ;-)
October 12th, 2005 at 9:23 pm
This stinks. Accounting facts about deferred income are meaningless when talking about the deceitful actions of the vice president of the US.
It is dishonest for the VP to profit from a company that has received no bid contracts from an Administration of which he is a member, “deferred income” notwithstanding. He should donate those profits to charity.
One more aspect of this administration’s corruption. Another Republican president had this to say about the presidential office, which includes members of his administration.
“The President is merely the most important among a large number of public servants, He should be supported or opposed exactly to the degree which is warranted by his good conduct or bad conduct, his efficiency or inefficiency in rendering loyal, able, and disinterested service to the Nation as a whole.
Therefore it is absolutely necessary that there should be full liberty to tell the truth about his acts, and this means that it is exactly necessary to blame him when he does wrong as to praise him when he does right. Any other attitude in an American citizen is both base and servile.
To announce that there must be no criticism of the President, or that we are to stand by the President, right or wrong, is not only unpatriotic and servile, but is morally treasonable to the American public. Nothing but the truth should be spoken about him or any one else. But it is even more important to tell the truth, pleasant or unpleasant, about him than about any one else.”
Theodore Roosevelt ca. 1918
The truth is not spoken enough in this country.
October 13th, 2005 at 12:18 am
JonBuck asked “How do you respond to the contention that this is a clear conflict of interest, regardless of when this pay was earned?”
Please explain to me how it is a conflict of interest. The amount of money that he receives had been determined *prior* to him becoming Vice President. There are no actions that he could take as a public official that would increase the amount of money that is being paid. In particular the amount doesn’t change if Halliburton received every single future contract offered by the US government. If his public policy actions have no effect on the deferred earnings how can there be a conflict of interest with respect to those earnings?
To me the phrase “conflict of interest” in this context means that there is an inverse relationship between the public interest and the private interest. That is to say the public official has an opportunity to improve his private situation by acting *against* the public interest. If the private interest in question (receiving deferred income)
can’t be changed by a policy action of the official then there is no conflict of interest
caused by that particular private interest.
Let me me clear here. I’m only responding to the criticism with respect to his *deferred* earnings. If there are some other type of income being received by Cheney from Halliburton that is dependent on the ongoing business operations of the company, that is not *deferred* income and isn’t what I am talking about.
October 13th, 2005 at 11:26 am
Justin,
I guess I’m just not clear on the intent here, was it just to perpetuate a smear against Cheney??? If you know that all the arraingments were made before he left hallibuton, involving money that he earned while actually working at Halliburton, why are you continuing to use the ’smear’ tatic of “it doesn’t pass the smell test”?
Everybody is entitled to be paid the agreed upon wage for work that was performed….. even Cheney.
This has been investigated multiple times, so maybe the ’smell’ is coming from yourself instead of Cheney…. maybe you should be questioning your own motives.
October 13th, 2005 at 12:00 pm
First, the numbers the Democrat put out there don’t seem to add up for me. But that could just be the fact that they’re talking about November of last year and not October.
Second, I think I’ve made the point that while this may be completely legal, it looks very bad, and maybe we should reconsider those laws. Simply put, if a Dem was doing the same thing, I’d talk about that too.
October 13th, 2005 at 2:41 pm
“Simply put, if a Dem was doing the same thing, I’d talk about that too. ”
Yeah, right…. ‘that doesn’t pass the smell test’!!!
October 13th, 2005 at 9:25 pm
OK, you dont understand stock options. The Democrat is right, because, Halliburton’s stock price was BELOW most of the exercise prices of Cheney’s options a year ago, now they have soared above his option price. The difference is all gravy. So the options were only worth $200K a year ago, and now $8 million.
All of Vice President’s Cheney’s stock options are “in the money” for the first time in years. According to the Vice President’s Federal Financial Disclosure forms, he holds the following Halliburton stock options:
100,000 shares at $54.5000 (vested), expire 12-03-07
33,333 shares at $28.1250 (vested), expire 12-02-08
300,000 shares at $39.5000 (vested), expire 12-02-09
October 13th, 2005 at 11:32 pm
No, I do understand stock options, but I didn’t understand the distribution because I couldn’t find those amounts, vesting dates and share prices. Obviously I was missing some info.
Jeez…cut me some slack Amos. I CAN add.
And debsay, if all you can do now is intimate that I’m a liar, then shame on you. I’ve argued for plenty of moderate and conservative points of view on this site. I’m still waiting for you to show us any pattern of trying to find common ground.
October 14th, 2005 at 3:45 am
Justin wrote:
I think I’ve made the point that while this may be completely legal, it looks
very bad, and maybe we should reconsider those laws.
What exactly is the problem here? According to your logic if I had a 9-5 job and worked in the first week of November and then was elected to public office that I would have to give up my paycheck for that first week when it arrived in my mailbox or bank account in the second week of November after the election. By what reasoning do you conclude that money earned *BEFORE* entering into public office has to be refused if it is *paid* after entering office? And exactly who would get that money instead of me?
Once again I’m talking about *deferred* earnings, not options, not stock holdings, not donations to a campaign fund or any of that.
October 18th, 2005 at 11:33 am
Justin, I think Amos was helping you, not saying that you can’t add. And, he is right. All this talk about “deferred” and “previously earned” income is just false. Perhaps the percent of stock he has is unchanged, but if the value of the company goes up, so do his dividends. And why is it that the value of the company is going up?? Oh yeah, it’s because Halliburton is getting all these contracts and support from the Bush administration and firends.