Paycheck Peeking

It’s really none of my business, but I decided to do it anyway. To be gauche. To ask the question you’re never supposed to ask.



“Pardon me, sir. How much money do you make?”

The reaction is predictable. Only slightly less hazardous (in most cases) than asking some pretty young thing at Commerce and Akard if she’d like to be your partner in a massage parlor.



People are incredibly paranoid about revealing their salaries. They seem to think money is a common denominator that can be used to compare the worth of one life to another. In a hard-driving city like Dallas, where success is measured at the bottom line, salaries and macho are inextricably intertwined.

But I didn’t ask the first person who came along. I was curious about people like Dallas school Superintendent Nolan Estes, clothing magnate Stanley Marcus and civic power Bob Cullum, to name a few.

The exercise turned into a two-way street in too many cases, a trade-out. Once rebuffed, I’d tell somebody who should know better about the 1973 Texas Open Records Act and then they’d grudgingly give the information as required by the Act.

Take the Estes case, for example. I wanted his salary and the salaries of a couple of other high school district officials. Assistant Superintendent John Santillo’s secretary bluntly told me, “We (the personnel department) don’t know how much these people make.”

“Do you mean the personnel department doesn’t know how much Nolan Estes, a DISD employee, makes?” I protested. Strange way to run a payroll. Santillo himself broke in to reiterate, “We just don’t know that.”

Confronted with the aforementioned state law and a renewed demand, Santillo again refused. His position collapsed only after the school district’s attorney said the information is public. Remarkable conduct for an administrator dragging down $33,150 from the taxpayers.

I must confess, however, that no governmental body in Dallas can top Parkland Hospital for withholding public information. I requested the top administrative salaries, which, the law says, are to be rendered “promptly.” I had to suffer the indignities of Parkland’s usual reper-toire of obfuscation devices: promising to return telephone calls but never doing it; claiming, “Gee, I just don’t have the authority to give you that, but you can call…” (who’s never there or won’t return the call). As a last resort, administrator Jack Price ($42,200) took my request to his board of managers. The board held a legally questionable closed meeting to decide whether to comply with the law and furnish the salaries. They decided to do so.

On another fiscal front, the Securities and Exchange Commission has open files on the salaries of Dallas’ top corporate executives. Any corporation which sells stock to the public must furnish its top salaries to the SEC, and the downtown public library has an excellent collection of those documents for Texas-based firms. But out-of-state companies’ filings are not readily available, and, as I later discovered, aren’t necessarily available from the firms themselves.

Take the case of Stanley Marcus. Neiman’s is owned by Carter Hawley Hale, a California corporation. I telephoned Neiman’s and asked one of Stanley’s secretaries if she might have an annual proxy statement published by Carter Hawley Hale Inc. That’s the document that lists top salaries, among other things.

“Why do you want it?” she asked.

“I need some information from it,” I replied. “It’s not a secret document.”

“Well, I don’t think we have one,” she said, voice rising.

“I don’t mind telephoning Carter Hawley Hale to get the information,” I retorted. “Would you mind telling me where in California the offices are?”

“Yes, I do mind,” she shot back. “If you don’t know where it is then, I don’t think I ought to tell you.”

One call to the library and I knew Carter Hawley Hale is headquartered in Los Angeles, and one call to the corporation’s office produced the information I sought – Stanley’s $145,000 salary.

Some of the companies I telephoned were very businesslike, and sent the information promptly. Others, like the Cullum Companies, refused to answer my questions, so I wrote Washington for a proxy, which cost a couple of bucks. The satisfaction was worth it.

Some salaries can be deceiving. Texas Instrument’s Mark Shepherd, for example, is listed as making $178,000 a year, but read the footnotes on the proxy and you’ll find he picks up an additional $180,000 in annual bonuses. Grand total: $358,000.

Or Ross Perot. Ross pays himself $68,000 a year as chairman of Electronic Data Systems. But since he owns 7.6 million shares of EDS stock, which paid 35 cents a share last year, he picks up an extra $2.7 million. Makes that $68,000 look like pocket change.

Watch the football jocks, too. Some of their contracts offer incentives for gaining 1,000 yards, making all pro, catching X-number of passes, etc. Then, there’s the extra bonus they can harvest from personal appearances, commercials and product endorsements. And the preachers can fool you -the men of the cloth are showered to high heaven by freebees.

We also made a special effort to throw in some salaries of people who are very definitely underpaid, such as Jeff Burroughs, the Texas Rangers slugger and American League’s most valuable player, at $40,000. And then we threw in a few who are outrageously overpaid, but we’ll let you guess who they are. Happy hunting.

Allen Cobb

MidSouthwest Securities, Inc.

Unequivocally, I would buy stock. Not hedge by putting $5,000 in stock and waiting to see what happens before investing the other half. Not buy stock if and when the Dow Jones goes to 475. Not any of the other popular finesses; but rather, put the entire amount in the stock market now.

It’s simply a question of price and a question of value. If the price is right, there are a lot of opportunities that can become smart investments. Most people aren’t aware of the unbelievable bargains that are available today. In my opinion, 1975 will go down as the greatest stock investing opportunity of this generation.

The Value Line Index covers 1,500 stocks, not just 30, and is a truer measure of the price performance of the average stock. Using 100 as the 1961 base, this VLI went to 180 in 1968 and is now below 50!

Let’s suppose for a moment that someone offered you an apartment complex, a warehouse, a producing oil well, a small manufacturing company, an insurance agency, a motel, or a tree farm at half the price it was selling for thirteen years ago. Let’s further suppose that this investment opportunity had been well cared for, had prospered, and was currently generating about three times the revenues, net income and cash payout that it was in 1961.

What would be your reaction? Would you pass it up? Would you only look at the negatives, quoting all the “authorities” on inflation, energy crisis, high interest rates, OPEC pricing, FIFO accounting, price of gold, German bank failures, depression, California falling into the Pacific and the probability of the ice age coming again?

I doubt it. I think you would probably sharpen your pencil, weigh the pros and cons, then jump at the opportunity to pick up a real investment bargain. These same investment opportunities are available today in the stock market in spades. The market is at a major bottom. I repeat: In the foreseeable future, I don’t think we will have an opportunity to make so much money with so little risk.

There are blue chips yielding 8% or 9% with terrific records of increasing their dividends. There are growth stocks, growing 15% or 20% a year and earning 15% or 20%. pretax on their sales. There are asset plays that are available at a fraction of their book values; some are even available at less than their net working capital.

Just in case my message hasn’t gotten through, I’ll sum it up in one three-letter word: BUY.

Ron Steinhart

Main Street National Bank

Let’s get one thing straight: $10,000 ain’t what it used to be. In purchasing power it buys less goods and services, less real estate, less securities, or whatever. Because of that, a return of 5% to 20% is less meaningful. And, also, it’s not as large a margin of safety for emergencies or large expenditures as it used to be.

For the last ten years the key word has been “leverage.” Everyone and his brother seemed to invest every dollar possible, and on top of this, use their assets to borrow more dollars to invest even more funds. The prevalent feeling was that the only way to assure financial growth was through the full use of every penny in a very active investment program.

The heyday is over. Now the key word is “liquidity.” Anyone in the last year or so who has reduced personal debts and increased readily available funds is in a good position to withstand the economic heat right now without being forced to take large investment losses. The guys with little liquidity and high leverage are taking a beating: They’re being forced to liquidate their assets at an unreasonably low value to meet maturing notes and other obligations.

So I’d stick with the safest bet: invest $10,000 of my discretionary funds in interest-bearing instruments readily convertible to good old cash. Personally, of course, I’d invest in bank deposits for the obvious reasons: safety of principal, greater ease in future borrowing, and the ability to convert to cash on a moment’s notice. Remember, now, I’m only talking about $10,000, which isn’t much. For greater amounts, I’d recommend a much more diversified investment program.

Mike Mayberry

Good Financial Corp.

In today’s economy, I’d think one would do well simply to maintain the integrity of his capital and earn a reasonable return on it. That’s no mean feat in itself, but how do you do it? If you put your $10,000 in a bank or S&L at 6%, the purchasing power of your savings will be eroded to the tune of 6% per year, given continuation of the current 12% rate of inflation. (At least you have federal government’s guarantee that you will get your depreciated dollars back.) Or, you may turn to that time-honored inflation hedge, the stock market. But, to my mind, the market’s track record casts a good deal of doubt on its reputation as an inflation protector. Current yield on common or even preferred stocks may be endangered by possible dividend reductions, while capital gain possibilities require the small investor to compete with the institutions which control the market.

This unfortunate set of investment circumstances hems you in. The only way out of the box is real estate. Forget the rumors you may have heard about real estate investment in Dallas. There are some incredible buys to be made now, if you know what you’re doing and if you’re capable of following some established ground rules.

Here’s where you’ll find those incredible buys: In the last few months a number of participants in good joint ventures have dropped out. The reasons are as old as human nature: the venture hasn’t met their expectations, they’ve developed personality conflicts with the other participants, or they’ve been caught in the squeeze of tight money. Through a real estate broker in whose judgment you have absolute confidence, you should be able to pick up a participant’s interest in one of these joint ventures at a bargain price. One word of warning: Stay away from the deal unless you know most of the other participants personally and have confidence in their ability and desire to. continue to meet their venture obligations. And be prepared financially to meet the obligations which you’ll have to assume upon purchase of the venture interest.

To sum up: Real estate is the best vehicle for the careful investor to realize the most from the use of his money. Good deals are always hard to come by, especially for the small investor. But there are good deals -even very lucrative deals -to be made now.

Bob Kolba

Park Central

First, I can tell you what I would not do. (1) I wouldn’t accede to the temptation to repay a portion of my home mortgage. The interest to be saved can be far surpassed by investment opportunities. (2) I wouldn’t repay an outstanding installment loan. Sure, the real interest rate on such a loan is relatively high, but you’ve already paid the major portion of your interest on the front end, so prepayment wouldn’t result in much of a saving.

I would attempt to meet these criteria: (a) preservation of capital (minimum risk on investment), (b) adequate return, and (c) potential for long range appreciation of capital.

Okay, now that we know what we want to do, where do we turn? Anybody who tells you to stick your money in a certificate of deposit or a savings account might have a point, but I can’t see any reason to bow down so abjectly to the great god Inflation.

Our three objectives can only be attained by purchasing selected common stocks in today’s market. (Note that I said selected stocks.) The market has hit its lowest trough. Substantial bargains now exist, and they can produce better-than-average dividend payments as well as opportunities for appreciation.

Look at it this way. Periods of economic uncertainty have a hidden blessing: The dice-rollers and the razzle-dazzle guys flock to the sidelines, usually nursing their wounds. The field is left open to stable investors who follow the fundamentals of sound financial planning. If you’re willing to rely on the fundamentals, the market is ripe for your investment.

Lloyd S. Bowles, Jr.

Dallas Federal Savings & Loan

When you get right down to it, everything depends on how disposed you are to take a flying leap. I’ll assume that you’ve taken all the leaps you can afford for a while.

A lot of money has been made recently by buying short-term paper, but the cost of admission is too high for the fellow with $10,000. The long-term markets (corporate, municipal and government bonds) typically carry a higher rate of return with a greater risk to principal. Although the Council of Elders atop Mt. Finance foresee relatively stable long-term rates, you can almost feel the downward pressure, generated by a corporate economy more disposed to continue plant expansion than to increase productivity (a virtue long ago sacrificed on the altar of labor negotiations).

Until the markets straighten out, I’d say that the better the liquidity, the better the investment. Through passbook savings or similar instruments, you are able to preserve your capital with some appreciation, while retaining the ability to move it into a more suitable investment when the time is ripe. Avoid the siren calls to invest in high risk/high return propositions. We’re not out of the woods yet, and nobody’s taking chances on when we will be.