Hope is not a plan
Wednesday, Oct 7, 2015 - Posted by Rich Miller
* Democratic US Senate candidate Andrea Zopp delivered a stirring speech at the the Illinois State Fair about the declining middle class, the wage disparity between “the have and have-nots.” She also said that she has a “track record of getting results.”
Greg Hinz looks at some of Zopp’s stock transactions when she was general counsel and corporate secretary at Sears…
According to U.S. Securities and Exchange Commission disclosures, Zopp’s first move came on Nov. 23, 2004—just a week after the merger [between Sears and Kmart] was announced—when she executed options to buy and immediately sold 10,000 [Sears] shares, making a $170,000 profit. A few weeks later, on Jan. 31, 2005, she did a similar deal involving 47,000 shares, making roughly a $176,000 profit.
My friends in the investment business would say that’s just taking advantage of your chances. But the problem is that Sears in 2003, when Zopp arrived at the company, laid off 40,000 workers. And tens of thousands of more layoffs came later in the wake of the merger, which like many mergers is all about making companies lean and mean so they can thrive—and make investors money.
Zopp, whose campaign website contains no mention of her corporate record and whose official biography has just one sentence about it, says her job was to be a lawyer, not to run operations, and that the stock options she received were “part of my compensation.”
She also points out—correctly—that Kmart had been in bankruptcy not long before the deal, saying that the merger “saved tens of thousands of other jobs. . . .Sears was seriously challenged at the time. We were doing a lot of things to try to turn it around.” […]
“I hope” the stock transactions and layoffs don’t become a campaign issue in the Democratic primary, she says. “I worked in the corporate world for 10 years as a senior executive. I was compensated for that.”
Zopp makes a good point about the merger, but she’s dreaming if she thinks this sort of stuff won’t be used against her in a Democratic primary campaign. It might not stick during a general, but that’s an entirely different animal than a primary.
- Chicago Cynic - Wednesday, Oct 7, 15 @ 2:17 pm:
I’m a Tammy supporter and not an Andi fan, but this is really weak gruel from my perspective. As I recall, she is not independently wealth and all she did was exercise stock options that would otherwise have expired. Talk about having no there there…
- Wordslinger - Wednesday, Oct 7, 15 @ 2:20 pm:
The NYT on Sunday had a piece that included Zopp among the “anti-establishment” candidates running around the country. Unfortunate lack of research.
- Precinct Captain - Wednesday, Oct 7, 15 @ 2:34 pm:
Zopp made a killing in the corporate world off the back of a company, admittedly going down the tubes in a changing retail world, that killed the jobs of tens of thousands of people. The competitors of Sears/Kmart have not fared as poorly as S/K has. Why? Better management from the top on down. Zopp made money off the backs of major job losses before and during her tenure on the Sears board. That’s a fact, one she will have to face.
- VanillaMan - Wednesday, Oct 7, 15 @ 2:35 pm:
…campaign website contains no mention of her corporate record and whose official biography has just one sentence about it…
She deliberately skirts around this, so she considers it a problem herself. We have a governor who did this kind of stuff, and we don’t need anyone else doing it.
No disclosure - no support.
- Truthteller - Wednesday, Oct 7, 15 @ 2:47 pm:
Just another example of à politician who would represent the interests of her corporate cronies if elected. I doubt there’s any evidence she argued against the layoffs or evidenced any other sympathy for the plight of Sears workers.As a Harvard grad, there’s a lot more useful things she could have done with her life than represent corporate interests
- Former Hoosier - Wednesday, Oct 7, 15 @ 3:18 pm:
She had so much promise at the start of her career…what happened? How did she fall into this whole corrupt corporate world stuff?
- Chicago Cynic - Wednesday, Oct 7, 15 @ 3:25 pm:
I don’t understand some of these comments. Former Hoosier, what the heck is it about exercising stock options that is corrupt? Should she have left money on the table?
Just spoke to a friend who was at Sears with Zopp and her reaction was that she was shocked someone as high up in the company as Zopp got so few stock options. Corrupt? No. Just part of working for a for-profit company.
- walker - Wednesday, Oct 7, 15 @ 3:40 pm:
Part of her compensation, and priced and structured so that she would almost surely make some money. Should she not have taken advantage of what her fellow senior officers also received?
Weak attack, except for those likely to hate all overpaid execs.
- Ducky LaMoore - Wednesday, Oct 7, 15 @ 3:43 pm:
Meh… What’s Dynamite Harris up to? This is really a boring primary race….
- HaroldJones - Wednesday, Oct 7, 15 @ 3:47 pm:
Zopp fails to realize that Tammy Duckworth is the Democrat specially anointed US Senate candidate? Tammy has been in government her whole life and Zopp’s real world experience is not needed at this time.
- Sir Reel - Wednesday, Oct 7, 15 @ 3:48 pm:
I agree the stock options were compensation. But the fact remains, Sears and K Mart were and are in trouble. She bears some responsibility.
Given that, what will she do about the middle class and income inequality? Just stating the problem isn’t new.
- Arthur Andersen - Wednesday, Oct 7, 15 @ 4:03 pm:
Weak sauce indeed. There are a number of reasons why “Andi” is a lousy candidate, but exercising legit stock options offered as compensation just isn’t one of them. There is also zero correlation between officers’ stock options and the subsequent success or lack thereof at this or any public company.
The company is circling the drain because it is effectively controlled by a hedgie who is a tad crazy.
- Team Sleep - Wednesday, Oct 7, 15 @ 4:20 pm:
But, folks, there’s a reason why Bernie Sanders is doing so well in the polls. It’s because people are angry about the corporate culture.
How many regular office staffers at a place like Cat or John Deere or even Sears get a chance or have anywhere near the kind of capital to buy and turnaround 10,000 shares?!
Some people are lucky enough to put $170,000 into a 401(k) during an entire career - let alone make it on a stock dump.
- Formerly Known As... - Wednesday, Oct 7, 15 @ 4:26 pm:
Many from @Chicago Cynic on have nailed it. She should have let the options expire worthless? She should have gone to work for a bank instead of a classic American company?
==How did she fall into this whole corrupt corporate world stuff?==
More corrupt than the world of politics? Illinois politics? Who wants to spend their career in that corrupt political world? Other than Mrs Duckworth…
- Former Hoosier - Wednesday, Oct 7, 15 @ 5:35 pm:
You go Team Sleep. I’m with you. What Zopp did is legal but, in my book, not ethical. Just because “everybody’s doing it” doesn’t make it right. And, if she feels so righteous about what she did, why has she downplayed it so much in her campaign info?
- Chicago Cynic - Wednesday, Oct 7, 15 @ 5:48 pm:
I swear some of you people must not get out much.
Hoosier, how is it not ethical to exercise stock options, which were a standard part of her comp package?
And then you have this nonsense from a Zopp supporter: “- HaroldJones - Wednesday, Oct 7, 15 @ 3:47 pm:
Zopp fails to realize that Tammy Duckworth is the Democrat specially anointed US Senate candidate? Tammy has been in government her whole life and Zopp’s real world experience is not needed at this time.”
Been in government her whole life? You think serving her country and almost dying in combat is the same as “been in government her whole life???” What a shameful thing to say. You are free to attack her political positions but how dare you dishonor her service?
- Dj83E - Wednesday, Oct 7, 15 @ 9:53 pm:
@Chicago Cynic
There are plenty of people who put their lives on the line everyday. The problem is using those people who put their lives on the line against those people who actually do the good work. We have one in the Governor’s office right now.
- chi - Thursday, Oct 8, 15 @ 7:52 am:
I don’t like Zopp, but this isn’t why. Did she cash her paychecks too? How dare her, the company was in trouble!