NY Times has compelling tale of greed
The New York Times has published what will probably stand as the definitive account of private equity’s greed in the mattress business. It is the story of the private equity owners who bought and sold Simmons over the years for “ever-rising prices” while burdening the company with growing debt.
The coverage begins in the lead position on Page 1: “Buyout Firms Profited As Company Debt Soared,” reads the main headline. The deck headline: “Mattress Maker Bought and Sold Six Times Is Now Headed for Bankruptcy.”
The story notes that Thomas H. Lee Partners, which bought Simmons in 2003, “pocketed around $77 million in profit, even as the company’s fortunes have declined.”
And it says that Simmons’ various private equity owners have made “around $750 million in profits from Simmons over the years.”
But the company has been forced to make deep cuts in its workforce and now Simmons and its employees “face an uncertain future,” the Times says.
A story on former Simmons CEO Charlie Eitel notes that he earned “more than $40 million in compensation, bonuses and perks,” according to an analysis cited by the Times. The headline is not likely to please Eitel: “An Executive Who Ruled From Afar and Walked Away Rich.”
The story on Eitel describes his entertaining customers on his yacht, Eitel Time. It quotes an executive of Thomas H. Lee Partners as defending the pay package and saying Eitel was always accessible to the firm.
Needless to say, all of this makes for fascinating reading.
Here’s a link to the Times stories:
http://www.nytimes.com/2009/10/05/business/economy/05simmons.html?_r=1&hp
mattress person commented:
Charlie is not alone. Someone needs to take a look at what David Mcllquham and Jim Hirshorn took away when they left Sealy. I am sure they did well to! Which only added to the price that Sealy customers paid for these name brands. Looks like these names brands were losers in the recent Consumer Reports article. GEE I wonder WHY? Dave and Charlie were too busy counting the money to drive the SHIP long term.
Mr. Imazinger commented:
For a long time Simmons executives have enjoyed perks like lavish dealer trips, private jets, and yachting. Meanwhile long-term employees like me had our benefits taken away. Like we couldn't do color copying or text messaging and they even took away our pizza fridays and neccessities like free water and gatorade.
The one thing that they didnt take away was my weekly culture email. I received this inspirational message every Monday morning at 7:03 am. It was the reason I got up in the mornings to come to work because of its reference to the Great Game of Life and those wonderful quotes by Charlie himself.
But what happened? Ever since the Chapter 11 announcement, my weekly culture email has gone away. What more are they going to take away from us employees? Simmons is no longer a place where I want to get up everyday and go to work like Charlie used to say.
I am begging Steve, Charlie and the other good ol boys up there at Corporate to PLEASE BRING BACK MY CULTURE EMAIL and the GREAT GAME OF LIFE KOOL-AID! By the time you really do bring back the emails though, I will probably be laid off.
Spotters Ready!
Mr. Imazinger
BabyBoomer commented:
I agree with BM2. Sh*t! what happened to Simmons is a sad, sad morality tale. I'm ashamed to be part of a generation that gave birth to private equity vampirism. A peace-and-love generation that descended into the Me-Me-Me--and everyone else be damned--Generation.
To Jane commented:
If you say anything at all bad or point out things wrong or things managment could do better,they will retaliate {management}it happens over and over.Jane you are right!! Again don't just scratch the surface ! Dig deeper.
calling a spade a spade commented:
What I find interesting is the people that are defending Charlie are the ones that have never worked WITH him. They see the smooth elequent speeches he gives at conferences and the perception he gives people in large gatherings of what a great guy he is. But to see what someone is really about, you need to watch them when they think no one is looking. All of the "rah rah" garbage that Charlie does in public is a calculated effort to get his employees to view him the way Charlie himself wants to be viewed. But in the Ivory tower, when he was there, it was a different story. Every decision he made was self serving and he didnt care what he needed to do to pave a way for a big payday for himself. And throughout all of the layoffs and cutbacks that occurred over the last few years, his family members that worked at Simmons still kept their high paying jobs while he was at the helm.
C&T commented:
Anyone working for Simmons the last several years could not help but notice the insatiable greed of the senior management team with Charlie leading the charge. All the while this was happening employees were feeling the pain through rate reductions and short hours. Many lost their cars and homes. Mr. Eitel blames everything on disgruntled employees. Who would not be disgruntled knowing your future was being destroyed so a few at the top could get rich. This group of senior managers are nothing more than snake oil salesmen with the knack of shining a pile of dung and serving it up on a silver platter. "It is still dung". Hope the new owners scratch a little below the surface because they will find a stench. This management team has lost all credibility. Time to clean house from top to bottom!
The Real Truth....Stop The BS commented:
Let's face it the "Simmons" Company will always be remember by its employees and competitors as a good company. But please stop with all of the excuses...The company has been poorly ran from ownership group to ownership group! There has been bout's of innovative success Which has lead to tremendous growth within this organization but the truth is everything from the "great game of lie's or life" to "the tremendous failure of the Olympic Queen and Healthsmart led to one fact alone...Simmons became extremely arrogant in it's success and took it's eye off of the ball and therefore is suffering because of HUGE SELF-SERVING EGOS. Everyone is to blame from Charlie to Steve etc...If you base performance on the "numbers" they have performed poorly and if the same standard applies then they have to go. I dream of the day were leaders hold each other to the same standard that they place on their subordinates. That will never happen when their performance is based on contracts, expense accounts, and huge severance packages. All of you loyalist you need to face the fact if you work for this organization you need to take a close look at their track record they are committed to one thing only and that is making money for their investors. That's their job...That's why they are there, and all decision lead to that end. Stop complaining and face the fact....As long as you work for this company you will forever be apart of a large "Flip" corporation who's goal is to make money for the owners and the executives and not for you!!! Simmons will make it out of this mess but at what cost to you!!!
Upset commented:
You no its not about what Charlie did yesterday,or two years ago. The fact is Simmons is bankrupt! Its what can you do today.I am not sure Simmons will pull out of this. Charlie is a fake and everyone knows it.I hope we all keep our jobs.
Lisa Stansbury commented:
Very well said Mr.Borreggine. I pointed out in another post that Mr. Eitel has done a lot of the industry through ISPA.
Some of these comments sicken me. You hide behind a pen name and say what you please. I have nothing to hide.
I have never worked for Charlie, per say. I have sold his products forever. He was always one of my favorite people to hear speak at the Bedding Conference. Industry wise I have always thought he was respected.
People can blame him all they want, but as a CEO you aren't making the decisions alone. Simmons has issues right now. It doesn't matter who caused them. They need to be fixed. I don't know that the "merger" or whatever we're calling it will save it.
I just wish the nation can get over this "Oh they have a boat and money, they're the bad guy." Jealousy and envy get us no where.
Annoyed commented:
Give me a break. Do you know how many of us are unemployed by the decisions of these people? We are not having wine overlooking mountains or yachting anywhere. We are struggling. Not by the decisions I made, but by the decisions they made. I was a loyal employee for a decade. This sickens me. Charlie is a FAKE!
Nameless commented:
I worked at Simmons close to 8 years. I loved my job - NOT because of Charlie, but because of the people. I sat right down the hall from Charlie. He passed my desk many times. I rode the elevator with him. I saw him in the lobby. HE NEVER KNEW MY NAME. Charlie looks out for Charlie. He's a self-centered, pompous, VERY RICH man. He is a very rich with THREE (3) million dollar plus homes and because of his greed, I am unemployed.
Jane commented:
Cut the bull. I was part of the survey. We were all afraid of saying anything bad or even telling the truth for fear of repercussion. Pretty scary when you start believing your own propaganda.
Loyal Employee commented:
To Employee - you've got it all wrong. Fortune 100 Best Places to Work is VERY difficult to get and you should be proud to have worked for a company that held the title. Charlie's passion for building Simmons' corporate culture, which by the way was the subject of a multi-part Harvard Business School case study - is unparalleled certainly in the industry and probably in any other. Too bad that you can't see Charlie for the visionary leader that he was. His heart was in the right place when he implemented Great Game of Life, which was a very successful program. But maybe you know better than Fortune Magazine and Harvard?
BM2 commented:
So what else is new in todays business world? The whole point of the article was to use Simmons as an example of what has been and is going on in a society driven by greed and sold out to self. Whether a current employee or former employee your only concern was and is for yourself -- what you could or can take home in the first place. What is it we always hear? If you don't take care of yourself nobody else will. Everyone needs to remember this -- when you are pointing your finger at another person, there are always 3 pointing back at you.
Fair & Balanced commented:
The media has been attacking highly paid CEOs for the last decade. The central theme has been a level of disgust with the relationship between CEO pay and performance, defined as stock price and what the CEO delivered to the owners (stock holders). During Charlie's tenure, the stock price went from around $8 to around $32, far outpacing the Dow Jones average during the same period. It tanked after he turned the reigns over to Hellyer. There is a long list of CEO's who got paid a lot more than Charlie and delivered a negative stock performance. Sure Charlie was driven in part by his own goals, but his team was on the same compensation plan and benefited as well. As far as the employees go, anyone who worked there at the time and was honest about the "Eitel Era" will recognize that there has never been a more presonally rewarding time to be a Simmons employee. Blame TH Lee and Hellyer, it was under their watch that things started going south.
sandman commented:
Nice words Gerry but at the end of the day what is his legecy. if you are talking about things from an industry perspective I guess that is one answer. If you ask the people that worked for him and truseted him to run that company there will be a different feeling about that. MANY families lost a lot because of his greed and his actions. DO NOT look at a man for what he says. Watch what he does!
Gerry Borreggine commented:
I realize it is a popular endeavor pile on, or to kick the guy who is under attack. For better or for worse -- depending on the person doing the judging -- I am an industry person. I have been in the mattress business most of my adult life. And, while I am not an employee of the Simmons Company, I did get to work with Charlie Eitel at ISPA.
I will say that Charlie is one of the few outsiders who came to our industry that “got it.” He came with a vision and an enthusiasm not only for his company, but for the industry. He tried to make it better. Sure, he had a boat in the water, and granted Simmons was a bigger boat that most of us floated. But Charlie understood that the health of the water not only impacted the vitality of his business, but it impacted the vitality of the industry in which his company operated. Charlie worked earnestly to improve the quality of the water in which we all floated our boats.
The fact that he was compensated handsomely is a separate issue, and it seems to be an issue his employers endorsed. That is not an industry issue. That issue belongs to Simmons and its owners.
Charlie Eitel came to our industry and tried to make it better. Not many other CEOs of the big brands, with resumes from outside industries, have done that, or even tried to do that. And, for that, I tip my hat to the man.
simmonsredlights commented:
I do think Charlie Eitel was all about Charlie and how much money Charlie could take from Simmons....He was the most arrogant supplier in the mattress industry and Charlie knew very little about the business of building a mattress. You cannot fault Hellyer for not caring about the company....Hellyer knows how to build a bed....Charlie used Hellyer and then trashed him in the industry.....thats Saint Eitel at his best.
The Real Truth.....Stop the BS commented:
1st Lie...."We want this to be a place where people want to work" Charlie
2nd Lie...."We are a hugging culture" Charlie
3rd Lie...."This bankruptcy is not going to affect you" Steve and the boys
Truth....You have time to get your resume's together and look out for yourself, because after they file bankruptcy and have to cut people you will leave with nothing; severance, benefits, or even your personal belongings...They will simply say "Thank you, good bye"
Real Truth...Stop the BS
rhlucas commented:
Their is no company in the bedding industry that has served up more new products than Simmons. Although HealthSmart didn't work, look no further than the changes Eitel made following that product miss. They proceeded to create amazing product lines and brought me new products faster than anyone else...not to mention the best point of sale materials that frankly do my job for me.
mattressman commented:
Hellyer never ceases to amaze with his lack of loyalty and backstabbing. If the SEC filing serves me right Hellyer walked away with $10+ million and now he serves up the company that treated him so well. I'd say Simmons was smart to jettison him and his track record at Spring Air says it all. No Credibility in this industry anymore Mr. Hellyer.
Another Employee commented:
Slurpeegirl: Short List. Wake up. Charlie is arrogant, greedy and a liar.
Employee commented:
This article is right on the mark. It's about time that these greedy bastards are exposed. Too many wonderful hard working employees have worked to make this a great company and then these so called Private Equity firms come in and suck the company dry like a vampire. And to the response from "slurpeegirl", Charlie Eitel was there to do two things, make a ton of cash for himself and to sell the company. He could care less about any of the employees. Charlie just made a statement defending his record. He says that these articles are from disgruntled employees. I am an employee and I am not disgruntled. I just see him as he really is, another (of many) CEOs that live in a fantasy world that really don't see the wrong that they have done. The NY times article about him personally is again right on the mark except for getting his wife's name wrong. Simmons has a lot of issues to fix but still has the talent and the products to emerge successfully if the Ares Management Group will let them. Ares can become a hero or totally destroy the company. Oh, by the way, Charlie's comment about Simmons being one of the top 100 Companies to work for by Fortune Magazine was a total joke to the employees of the company. It made us all laugh!
slurpeegirl commented:
Too bad the press focuses on nothing but the bad to drive a good story. Charlie Eitel is the man who has tried to bring nothing but positive change to the mattress industry...not self- hoarding materialism as the article so indicates. Get your story straight people by uncovering the heart of a man--not by attacking what his hard work has profited him. Not to mention, the author couldn't even get his wife's name right..that lack of attention to detail certainly discredits the source in my opinion. If you were positively impacted by Charlie Eitel--I encourage you to step up and share those stories of truth so the world knows who the REAL man is!
Sandman commented:
I am tired of all of these stories of corporate greed. The private equity guys and those sitting at that table negociating with them know full well what they are doing and the risk. If they don't fully get it, then they have no business gambeling with their employee's retirement. Isn't there a disclaimer that most of us have to put on our earnings statements that say "past performance is no indication of future results". So they are willing to be foolish enough to "bet the farm"...leverage the company along with peoples lives, and HOPE that things continue on as they are becuase if they don't....there is no way in hell they could have serviced that debt. Maybe I am over simplyfying things but maybe others are making them too complex. Never have so few taken so much from so many for so long.
Dan Floris commented:
Been with company for a long time , we have nothing anymore!! Thanks CHARLIE.
Steve commented:
Im sure Zalman Simmons is none too happy.
