Saturday, February 7, 2009

Denny's smart giveaway

By DeWayne Wickham

John Thain, meet Nelson Marchioli.

Thain, if you haven't kept up, is the former Merrill Lynch chief executive who paid nearly $2 billion in bonuses to employees of that troubled firm as it was posting a $15 billion loss, shortly before being acquired by Bank of America.

Thain has become a poster child for Wall Street's excesses. As Merrill Lynch's losses piled up, he spent $1.2 million decorating his office. He doled out $87,000 for an area rug, $35,000 for a commode, and $1,400 for a trash can. No, that's not a typo. Thain spent $1,400 on a trash can.

In a time of corporate greed run amuck, Thain is the real-life manifestation of Gordon Gekko, the ruthless corporate raider in the 1987 movie "Wall Street" who proclaimed that, "greed, for lack of a better word, is good."

Marchioli is a corporate boss of another sort. He's the CEO of Denny's, which used to be one of the nation's top breakfast restaurants but now trails behind McDonald's, Starbucks, Dunkin' Donuts, Burger King and IHOP.

Instead of raiding his company's coffers for unearned bonuses and the cost of a pricey toilet, Marchioli hatched an innovative plan to boost Denny's market share. He served free breakfast to 2 million people two days after the Super Bowl.

The giveaway, announced in an ad that aired during the game, cost Denny's $5 million. But get this: It got the company an estimated $50 million worth of free media coverage. And it produced enough profit from selling drinks with the free meals to enable Denny's "to do better than break-even" on the day, Marchioli told USA TODAY.

How about that for corporate ingenuity?

I don't know if the Denny's giveaway will boost the company back into the top ranks of breakfast restaurant chains. But it sets a great example in a business environment dogged by reports of corporate executives who pad their pockets while seeking billions of taxpayer dollars to keep their firms out of bankruptcy.

"This is America. We don't disparage wealth," President Barack Obama said in announcing a $500,000 cap on the pay of executives seeking government aid. "But what gets people upset - and rightfully so - are executives being rewarded for failure, especially when those rewards are subsidized by U.S. taxpayers, many of whom are having a tough time themselves."

Those stumbling, bumbling corporate executives have gotten a lot of media attention as the federal government has been forced to dig into the Treasury for hundreds of billions to bail out troubled businesses.

The resulting rage among taxpayers pushed Obama to order the pay cap for executives getting what he calls "extraordinary help" from the government. Obama also is requiring those firms to disclose "all the perks and luxuries" given top managers - the kind of public revelation that might have kept a $35,000 toilet out of Thain's executive bathroom.

"We're asking these firms to take responsibility, to recognize the nature of this crisis and their role in it," Obama said.

I'd like to see a lot more corporate bigwigs with Marchioli's smarts - and a lot fewer with Thain's gall.

It's going to take a lot more than a financial bailout to rescue American businesses from the recession engulfing this nation. What is needed are corporate leaders smart enough to make a profit on a $5 million giveaway - without help from the Treasury.

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