BILL MOYERS: In downtown Rochester, New York, a group of workers from the telecommunications company Global Crossing have gathered in frustration and anger.

RAY BUEBEL (WORKER): I just cannot fathom these people at the very top of these corporations ripping people off.

BILL MOYERS: They're holding a town meeting following the company's recent bankruptcy. Global Crossing is one of Rochester's major employers.

REP. LOUISE SLAUGHTER (D-NY): The economic displacement to our community is profound, and we stand to lose if these people move away to find jobs elsewhere.

PAT BAUER (WORKER): I believe Enron and Global were set-up for the same purpose, to make millions of dollars for their CEO's and to leave the rest of us behind.

MOYERS: We're hearing a lot of complaints about corporate executives these days. Most of those complaints are about the high pay they get, even when companies do poorly, or in the case of Global Crossing, go bankrupt. And often, executives are getting rich while workers are left with nothing.

BAUER: Most of us are out, on the minimum, of at least a hundred thousand dollars from when the stock was high.

MOYERS: Consider this: from 1999 to November 2001, the Chairman of Global Crossing, Gary Winnick, cashed in stock worth nearly $735 million dollars. Co-founder Barry Porter reaped 95 million dollars from stock sales. And co-chairman Lodwrick Cook made almost 32 million dollars from his stock.

RAY BUEBEL: They were taking their stock and selling it and making millions off of those, like Gary Winnick did. He took his big profit right out of the top of the company here.

MOYERS: Global Crossing and Enron provoked such outrage is because a select few got rich while many suffered. But although they may be the most glaring examples of executives getting fat pay at faltering companies, they're not the only ones.

BUD CRYSTAL (COMPENSATION ANALYST): It's pay for any performance. That's what we have. Pay for any performance. Bad — we pay for that too. I mean, it's a joke.

MOYERS: Bud Crystal is one of the country's foremost analysts on executive pay. He writes for Bloomberg News. He's been looking over the numbers for last year, looking for other overpaid underachievers.

CRYSTAL: For example, at SBC Communications, the huge giant phone company, Ed Whitacre has a couple of years in a row now received a $10.5 million retention bonus. And you say, 'Pardon me, but the performance of this company is not very good. Why do you want to retain Ed Whitacre?' I mean, maybe what we should do is encourage him-we'll do the Trojan Horse School of Management-we can encourage him to go work for another company and wreck that one. What do we need to retain this person for?

MOYERS: For 2001, Crystal cites plenty of examples he finds outrageous. Gordon Bethune runs Continental Airlines. Not only did Continental lose money last year, the company got 174 million dollars as part of a federal bailout. Yet, Bethune received over three million dollars in bonus and incentive payments.

And then there's Dennis Kozlowski. He's the Chief Executive Officer of the conglomerate Tyco International. The return on Tyco stock in 2001 was a negative 12.2%, yet Kozlowski was paid 80 million dollars.

CRYSTAL: If you had a good year, the CEO appeared in front of the shareholders garbed in the robes of Caesar, he had the laurel wreath around his head, and you know, 'I am the person who brought you this magnificent performance.' So then we have a bad year and we don't have Caesar anymore. Now we have a CEO out with a Pontius Pilate wash basin and he's washing his hands and has the towel and he says, 'It's not my fault.

MOYERS: Crystal knows the world of CEO's. He was once America's top compensation consultant, advising companies on how much to pay their executives. But he quit the business — fed up, he says, with the greed and hypocrisy.

CRYSTAL: Pardon me — If you pay in the good times and pay in the bad times, there's only two types of times as far as I know. Good times and bad times. When is it that these guys really get it, you know, in the neck? They never do.

IRA KAY (COMPENSATION CONSULTANT): I think when you have six or seven thousand companies, there's going to be egregious examples.

MOYERS: Not everyone, of course, believes CEO pay is out of whack. Ira Kay is a well known compensation consultant who advises some of America's biggest companies. He says, overall, pay is just about right.

KAY: Are there examples of tremendously bad performance with relatively high pay? Yes. Are there examples of tremendously high performance with relatively low pay? Yes. Those examples are not the typical, they're not the modal, they're not the median, and they're certainly not good policy.

MOYERS: Kay says to think of executive pay this way: A 100 million dollars for a CEO may sound like a lot, but given the economic growth they create, a 100 million dollars is a drop in the bucket.

KAY: So if they created, you know, ten billion dollars worth of value, one percent of ten billion is 100 million dollars. We think that a typical chief executive officer who is earning one or two percent of the appreciation in their company's market value, one could look at that as a pretty good bargain.

MOYERS: But as critics like Bud Crystal point out, 100 million dollars is a huge loaf of bread, no matter how you slice it.

CRYSTAL: When I did a study of CEO pay in 1973 for major companies, the ratio of pay of the CEO to the worker was 140 times. Then it kept rising and rising...200...300. Now it's very close to 500 times. So I mean, there's some just enormous numbers. We have some billionaires now, who got all their money by being CEO's of companies.

MOYERS: To understand why CEO pay is so high, you need to look at how CEO's are paid. Not only do they get salaries and bonuses, they get another form of pay called stock options. Simply, a stock option is the right to buy a share of company stock at a low fixed price. For example, let's say that fixed price is ten dollars. Now, let's say the stock goes up in value to $20 a share. Since you can buy it for ten, you make ten dollars profit per share. And if you have been given a million options, that's ten million dollars profit.

CHARLES ELSON (PROF. UNIV. OF DELAWARE): Nothing surprises me today.

MOYERS: Charles Elson is a Professor of Business at the University of Delaware. He says stock options are almost always a guarantee of riches for two reasons: They can be exercised years after they are first given, and stock prices generally rise over time.

ELSON: The country's gross national product always grows. Three, four percent, we're always expanding, there is a natural affinity to expand. The same thing with a corporation.

MOYERS: In other words, because stock prices tend to rise over time, options set at low prices today can have huge payoffs down the road.

CRYSTAL: When you think about stock options, people are in effect, in a given year harvesting crops that were planted often as much as seven or eight years earlier.

MOYERS: It was assumed CEO pay would decline last year because of the recession. And in many cases, salaries and bonuses did go down. But options continued to be a big part of executive pay packages. And options will ensure many CEO's continue to prosper.

MOYERS: Again, a couple of case studies. Wayne Sanders is CEO of the consumer products company Kimberly Clark. He didn't get his bonus last year because of missed goals. But never mind. He still got stock options for half a million shares that, in the future, could be worth as much as 55 million dollars.

William Esrey is the CEO of phone giant Sprint. Sprint lost 1.4 billion dollars last year. Yet Esrey got five million options that could be worth as much as 188 million dollars.

So Crystal says, don't believe it if you hear executives claim they went through hard times last year.

CRYSTAL: It's almost like we have to book Carnegie Hall for a benefit concert for these poor souls. At the very time that's happening, very quietly, you know, all of New Jersey is being planted with options. I mean, you just can't see anything but stock options in the ground. Just little tiny shoots, but pretty soon they're going to become nice sized plants.

MOYERS: Last year also saw another twist involving options. It's called "re-pricing." Remember, over time, it's assumed stocks will rise. But what if stocks fall? With re-pricing, a CEO turns in his existing options and then gets new ones that allow him to buy stock even more cheaply. Last year, Gordon Bethune of Continental Airlines initiated such a swap. Industry analysts say he'll soon get 800,000 replacement options, making him a winner even in a down market.

PETER CLAPMAN (TIAA-CREF): That produces a heads I win, tails let's flip again kind of mentality.

MOYERS: Peter Clapman works for TIAA-CREF, the world's largest pension fund.

CLAPMAN: You can't have a compensation program where people constantly adjust the different components and different methodologies based on whether the market is going up or down.

MOYERS: TIAA-CREF manages retirement money for millions of small investors. They say tricks like "re-pricing" are costing their shareholders money.

CLAPMAN: That's money that really should not be going to the executives that are producing mediocre performance. They're taking money out of the shareholders returns.

MOYERS: Over the last few years, TIAA-CREF has started to confront companies over the issue of pay, seeking reforms. As a large institutional investor, TIAA-CREF has the muscle to negotiate with companies. But many individual investors are also upset. So how does one person gets heard?

ROGER RATH (SHAREHOLDER ACTIVIST): So this is all coming off the bottom line. As a shareholder, you know, I'm disgusted.

MOYERS: Roger Rath is what's know as a shareholder activist. He, too, tries to get companies to change. But he does it by attending annual company meetings where an individual can speak directly to those in charge.

RATH: I think the board of directors of these companies have to stand up to these people who are apparently very greedy and say, "Enough is enough. And when are you going to deliver the goods for us? And even if you do, we're not going to continue to pay you outrageous sums of money."

MOYERS: Rath believes the problem of excessive pay can be traced to so-called "crony boards" — board of directors packed with friends of management. After all, it's the board of directors who approve pay packages and oversee how a company is run.

RATH: It's a club. And you know they're on each others' boards. They basically are there to rubber stamp anything the CEO wants.

MOYERS: TIAA-CREF also believes that crony boards are a problem and has focused much of its muscle on busting them up. Professor Charles Elson now sits on the board of directors of several major companies — put there at the suggestion of big pension funds. The hope is an outsider like Elson can act as an independent voice.

CHARLES ELSON: If the board itself is management, it's impossible to negotiate with yourself. Everyone knows if you negotiate with yourself, you negotiate a very good deal for yourself, and not necessarily a very good deal for the company.

IRA KAY (COMPENSATION CONSULTANT): I have found that on these key corporate governance issues that board members take their responsibilities extremely seriously.

MOYERS: Compensation consultant Ira Kay says the criticism of boards, like the criticism of pay, is often exaggerated.

KAY: I attend two or three compensation committee meetings a month. Probably one full board meeting a month. And there is excellent questioning by very, very intelligent people. So I think they are extremely interested and they are very motivated.

MOYERS: That reassurance doesn't mean a whole lot to someone like Matt Fico. He worked for Global Crossing. In the company's collapse, he not only lost his job, but his savings and his severance-a payment of $1000 a week.

MATT FICO (GLOBAL CROSSING EMPLOYEE): To me, the money they owed me is a lot of money. It might not be to some people, but it's a lot of money that we were relying on to pay our daily needs. Food, mortgage, car payments. It was a big blow.

MOYERS: But at the same time Fico was being let go, Global Crossing hired a new CEO named John Legere. As part of a "welcome aboard" package, Legere was given bonuses and gifts totaling at least 16 million dollars.

FICO: If the company's doing so poorly, why is there millions of dollars available to executives? Its almost like they're speaking out of both sides of their mouth.

MOYERS: And don't forget the other Global Crossing executives, like Chairman Gary Winnick. It was proceeds from his 735 million dollar stock sale that helped him to buy this estate, reported to be the most expensive single-family home in America.

FICO: He bought a $62 million dollar home. It's the most expensive home in the United States. He's putting 15 million dollars into this house but until he walks in my shoes for a day he will never understand.

CRYSTAL: I mean, that's what I like to call the executive compensation Olympics.

MOYERS: Bud Crystal says the next time you hear a story about a company like Global Crossing, where the top guys got rich as the company went down the drain, think of it as a new version of the Olympic high jump.

CRYSTAL: You know, in the real Olympics, if you're doing the high jump, you set the bar at six feet, and you invite the person to jump over it. And if he does, you move the bar up. If he crashes into it, that's the end. He's finished. Now the executive compensation Olympics starts the same way, we have the bar at six feet. But if you crash into it, we don't send you to the showers, we lower the bar to five feet and invite you to try again. And then, if that doesn't work, then we lower it to four feet and to three feet. If we have too, we'll bury the bar. And you can walk across and get the gold medal.